99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
SB1476
 
Introduced 2/20/2015, by Sen. James F. Clayborne, Jr.
 
SYNOPSIS AS INTRODUCED:



 
20 ILCS 3501/825-65
20 ILCS 3855/1-10

 Amends the Illinois Finance Authority Act. In the definition of "Energy Efficiency Project", includes measures that decrease the heat rate in the generation of electricity. Amends the Illinois Power Agency Act. In the definition of "energy efficiency", includes measures that decrease the heat rate in the generation of electricity. Effective immediately.



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A BILL FOR
 


SB1476LRB099 09991 AMC 30211 b



1 AN ACT concerning State government.


2 Be it enacted by the People of the State of Illinois,

3represented in the General Assembly:



4 Section 5. The Illinois Finance Authority Act is amended by 
5changing Section 825-65 as follows:

6 (20 ILCS 3501/825-65)
7 Sec. 825-65. Clean Coal, Coal, Energy Efficiency, and 
8Renewable Energy Project Financing. 
9 (a) Findings and declaration of policy.
10  (i) It is hereby found and declared that
Illinois has 
11 abundant coal resources and, in some areas of Illinois, the 
12 demand
for power exceeds the generating capacity. 
13 Incentives to encourage the
construction of coal-fueled 
14 electric generating plants in Illinois to ensure
power 
15 generating capacity into the future and to advance clean 
16 coal technology and the use of Illinois coal are in the 
17 best interests of all of
the citizens of Illinois.
18  (ii) It is further found and declared that Illinois has 
19 abundant potential and resources to develop renewable 
20 energy resource projects and that there are many 
21 opportunities to invest in cost-effective energy 
22 efficiency projects throughout the State. The development 
23 of those projects will create jobs and investment as well 
 
 
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1 as decrease environmental impacts and promote energy 
2 independence in Illinois. Accordingly, the development of 
3 those projects is in the best interests of all of the 
4 citizens of Illinois.
5  (iii) The Authority is authorized to issue bonds to 
6 help
finance Clean Coal, Coal, Energy Efficiency, and 
7 Renewable Energy projects pursuant to this
Section.
8 (b) Definitions.
9  (i) "Clean Coal Project" means (A) "clean coal 
10 facility", as defined in Section 1-10 of the Illinois Power 
11 Agency Act; (B) "clean coal SNG facility", as defined in 
12 Section 1-10 of the Illinois Power Agency Act; (C) 
13 transmission lines and associated equipment that transfer 
14 electricity from points of supply to points of delivery for 
15 projects described in this subsection (b); (D) pipelines or 
16 other methods to transfer carbon dioxide from the point of 
17 production to the point of storage or sequestration for 
18 projects described in this subsection (b); or (E) projects 
19 to provide carbon abatement technology for existing 
20 generating facilities. 
21  (ii) "Coal Project" means new electric
generating 
22 facilities or new gasification facilities, as defined in

23 Section 605-332 of the Department of Commerce and
Economic 
24 Opportunity Law of the Civil Administrative Code of 
25 Illinois, which
may
include mine-mouth power plants, 
26 projects that employ the use of clean coal
technology, 
 
 
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1 projects to provide scrubber technology for existing 
2 energy
generating plants, or projects to provide electric 
3 transmission facilities or new gasification facilities.
4  (iii) "Energy Efficiency Project" means measures that 
5 reduce the amount of electricity or natural gas required to 
6 achieve a given end use, consistent with Section 1-10 of 
7 the Illinois Power Agency Act. "Energy Efficiency Project" 
8 also includes measures that reduce the total Btus of 
9 electricity and natural gas needed to meet the end use or 
10 uses and measures that decrease the heat rate in the 
11 generation of electricity consistent with Section 1-10 of 
12 the Illinois Power Agency Act.
13  (iv) "Renewable Energy Project" means (A) a project 
14 that uses renewable energy resources, as defined in Section 
15 1-10 of the Illinois Power Agency Act; (B) a project that 
16 uses environmentally preferable technologies and practices 
17 that result in improvements to the production of renewable 
18 fuels, including but not limited to, cellulosic 
19 conversion, water and energy conservation, fractionation, 
20 alternative feedstocks, or reduced green house gas 
21 emissions; (C) transmission lines and associated equipment 
22 that transfer electricity from points of supply to points 
23 of delivery for projects described in this subsection (b); 
24 or (D) projects that use technology for the storage of 
25 renewable energy, including, without limitation, the use 
26 of battery or electrochemical storage technology for 
 
 
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1 mobile or stationary applications. 
2 (c) Creation of reserve funds. The Authority may establish 
3and maintain one
or more reserve funds to enhance bonds issued 
4by the Authority for a Clean Coal Project, a Coal Project, an 
5Energy Efficiency Project, or a Renewable
Energy Project.
There 
6may be one or more accounts in these reserve funds in which 
7there may be
deposited:
8  (1) any proceeds of the bonds issued by the Authority 
9 required to
be deposited therein by the terms of any 
10 contract between the Authority and its
bondholders or any 
11 resolution of the Authority;
12  (2) any other moneys or funds of the Authority that it 
13 may
determine to deposit therein from any other source; and
14  (3) any other moneys or funds made available to the 
15 Authority.
Subject to the terms of any pledge to the owners 
16 of any bonds, moneys in any
reserve fund may be held and 
17 applied to the payment of principal, premium, if
any, and 
18 interest of such bonds.
19 (d) Powers and duties. The Authority has the power:
20  (1) To issue bonds in one or more series pursuant to 
21 one or more
resolutions of the Authority for any Clean Coal 
22 Project, Coal Project, Energy Efficiency Project, or 
23 Renewable Energy Project authorized
under this Section, 
24 within the authorization set forth in subsection (e).
25  (2) To provide for the funding of any reserves or other 
26 funds or
accounts deemed necessary by the Authority in 
 
 
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1 connection with any bonds issued
by the Authority.
2  (3) To pledge any funds of the Authority or funds made 
3 available to
the Authority that may be applied to such 
4 purpose as security for any bonds or
any guarantees, 
5 letters of credit, insurance contracts or similar credit

6 support
or liquidity instruments securing the bonds.
7  (4) To enter into agreements or contracts with third 
8 parties,
whether public or private, including, without 
9 limitation, the United States of
America, the State or any 
10 department or agency thereof, to obtain any

11 appropriations, grants, loans or guarantees that are 
12 deemed necessary or
desirable by the Authority. Any such 
13 guarantee, agreement or contract may
contain terms and 
14 provisions necessary or desirable in connection with the

15 program, subject to the requirements established by the 
16 Act.
17  (5) To exercise such other powers as are necessary or 
18 incidental to
the foregoing.
19 (e) Clean Coal Project, Coal Project, Energy Efficiency 
20Project, and Renewable Energy Project bond authorization and 
21financing limits. In
addition
to any other bonds authorized to 
22be issued under
Sections 801-40(w), 825-60, 830-25
and 845-5, 
23the Authority may have outstanding, at any time, bonds for the

24purpose
enumerated in this
Section 825-65 in an aggregate 
25principal amount that shall not
exceed $3,000,000,000, subject 
26to the following limitations: (i) up to $300,000,000 may be 
 
 
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1issued to
finance projects, as described in clause (C) of 
2subsection (b)(i) and clause (C) of subsection (b)(iv) of this 
3Section 825-65; (ii) up to $500,000,000 may be issued to

4finance projects, as described in clauses (D) and (E) of 
5subsection (b)(i) of this Section 825-65; (iii) up to 
6$2,000,000,000 may
be issued to finance Clean Coal Projects, as 
7described in clauses (A) and (B) of subsection (b)(i) of this 
8Section 825-65 and Coal Projects, as described in subsection 
9(b)(ii) of this Section 825-65; and (iv) up to $2,000,000,000 
10may be issued to finance Energy Efficiency Projects, as 
11described in subsection (b)(iii) of this Section 825-65 and 
12Renewable Energy Projects, as described in clauses (A), (B), 
13and (D) of subsection (b)(iii) of this Section 825-65. An 
14application for a loan
financed from bond proceeds from a 
15borrower or its affiliates for a Clean Coal Project, a Coal 
16Project, Energy Efficiency Project, or a Renewable
Energy 
17Project may not be approved by the Authority for an amount in 
18excess
of $450,000,000 for any borrower or its affiliates. A 
19Clean Coal Project or Coal Project must be located within the 
20State. An Energy Efficiency Project may be located within the 
21State or outside the State, provided that, if the Energy 
22Efficiency Project is located outside of the State, it must be 
23owned, operated, leased, or managed by an entity located within 
24the State or any entity affiliated with an entity located 
25within the State. These bonds shall not
constitute an 
26indebtedness or obligation of the State of Illinois and it 
 
 
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1shall
be plainly stated on the face of each bond that it does 
2not constitute an
indebtedness or obligation of the State of 
3Illinois, but is payable solely from
the revenues, income or 
4other assets of the Authority pledged therefor.
5 (f) The bonding authority granted under this Section is in 
6addition to and not limited by the provisions of Section 845-5.
7(Source: P.A. 98-90, eff. 7-15-13.)

8 Section 10. The Illinois Power Agency Act is amended by 
9changing Section 1-10 as follows:



10 (20 ILCS 3855/1-10)


11 Sec. 1-10. Definitions. 
12 "Agency" means the Illinois Power Agency.
13 "Agency loan agreement" means any agreement pursuant to 
14which the Illinois Finance Authority agrees to loan the 
15proceeds of revenue bonds issued with respect to a project to 
16the Agency upon terms providing for loan repayment installments 
17at least sufficient to pay when due all principal of, interest 
18and premium, if any, on those revenue bonds, and providing for 
19maintenance, insurance, and other matters in respect of the 
20project.
21 "Authority" means the Illinois Finance Authority.
22 "Clean coal facility" means an electric generating 
23facility that uses primarily coal as a feedstock and that 
24captures and sequesters carbon dioxide emissions at the 
 
 
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1following levels: at least 50% of the total carbon dioxide 
2emissions that the facility would otherwise emit if, at the 
3time construction commences, the facility is scheduled to 
4commence operation before 2016, at least 70% of the total 
5carbon dioxide emissions that the facility would otherwise emit 
6if, at the time construction commences, the facility is 
7scheduled to commence operation during 2016 or 2017, and at 
8least 90% of the total carbon dioxide emissions that the 
9facility would otherwise emit if, at the time construction 
10commences, the facility is scheduled to commence operation 
11after 2017. The power block of the clean coal facility shall 
12not exceed allowable emission rates for sulfur dioxide, 
13nitrogen oxides, carbon monoxide, particulates and mercury for 
14a natural gas-fired combined-cycle facility the same size as 
15and in the same location as the clean coal facility at the time 
16the clean coal facility obtains an approved air permit. All 
17coal used by a clean coal facility shall have high volatile 
18bituminous rank and greater than 1.7 pounds of sulfur per 
19million btu content, unless the clean coal facility does not 
20use gasification technology and was operating as a conventional 
21coal-fired electric generating facility on June 1, 2009 (the 
22effective date of Public Act 95-1027). 
23 "Clean coal SNG brownfield facility" means a facility that 
24(1) has commenced construction by July 1, 2015 on an urban 
25brownfield site in a municipality with at least 1,000,000 
26residents; (2) uses a gasification process to produce 
 
 
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1substitute natural gas; (3) uses coal as at least 50% of the 
2total feedstock over the term of any sourcing agreement with a 
3utility and the remainder of the feedstock may be either 
4petroleum coke or coal, with all such coal having a high 
5bituminous rank and greater than 1.7 pounds of sulfur per 
6million Btu content unless the facility reasonably determines

7that it is necessary to use additional petroleum coke to

8deliver additional consumer savings, in which case the
facility 
9shall use coal for at least 35% of the total
feedstock over the 
10term of any sourcing agreement; and (4) captures and sequesters 
11at least 85% of the total carbon dioxide emissions that the 
12facility would otherwise emit. 
13 "Clean coal SNG facility" means a facility that uses a 
14gasification process to produce substitute natural gas, that 
15sequesters at least 90% of the total carbon dioxide emissions 
16that the facility would otherwise emit, that uses at least 90% 
17coal as a feedstock, with all such coal having a high 
18bituminous rank and greater than 1.7 pounds of sulfur per 
19million btu content, and that has a valid and effective permit 
20to construct emission sources and air pollution control 
21equipment and approval with respect to the federal regulations 
22for Prevention of Significant Deterioration of Air Quality 
23(PSD) for the plant pursuant to the federal Clean Air Act; 
24provided, however, a clean coal SNG brownfield facility shall 
25not be a clean coal SNG facility. 
26 "Commission" means the Illinois Commerce Commission.
 
 
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1 "Costs incurred in connection with the development and 
2construction of a facility" means:
3  (1) the cost of acquisition of all real property, 
4 fixtures, and improvements in connection therewith and 
5 equipment, personal property, and other property, rights, 
6 and easements acquired that are deemed necessary for the 
7 operation and maintenance of the facility;
8  (2) financing costs with respect to bonds, notes, and 
9 other evidences of indebtedness of the Agency;
10  (3) all origination, commitment, utilization, 
11 facility, placement, underwriting, syndication, credit 
12 enhancement, and rating agency fees;
13  (4) engineering, design, procurement, consulting, 
14 legal, accounting, title insurance, survey, appraisal, 
15 escrow, trustee, collateral agency, interest rate hedging, 
16 interest rate swap, capitalized interest, contingency, as 
17 required by lenders, and other financing costs, and other 
18 expenses for professional services; and
19  (5) the costs of plans, specifications, site study and 
20 investigation, installation, surveys, other Agency costs 
21 and estimates of costs, and other expenses necessary or 
22 incidental to determining the feasibility of any project, 
23 together with such other expenses as may be necessary or 
24 incidental to the financing, insuring, acquisition, and 
25 construction of a specific project and starting up, 
26 commissioning, and placing that project in operation.
 
 
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1 "Department" means the Department of Commerce and Economic 
2Opportunity.
3 "Director" means the Director of the Illinois Power Agency.
4 "Demand-response" means measures that decrease peak 
5electricity demand or shift demand from peak to off-peak 
6periods.
7 "Distributed renewable energy generation device" means a 
8device that is:
9  (1) powered by wind, solar thermal energy, 
10 photovoltaic cells and panels, biodiesel, crops and 
11 untreated and unadulterated organic waste biomass, tree 
12 waste, and hydropower that does not involve new 
13 construction or significant expansion of hydropower dams;
14  (2) interconnected at the distribution system level of 
15 either an electric utility as defined in this Section, an 
16 alternative retail electric supplier as defined in Section 
17 16-102 of the Public Utilities Act, a municipal utility as 
18 defined in Section 3-105 of the Public Utilities Act, or a 
19 rural electric cooperative as defined in Section 3-119 of 
20 the Public Utilities Act;
21  (3) located on the customer side of the customer's 
22 electric meter and is primarily used to offset that 
23 customer's electricity load; and
24  (4) limited in nameplate capacity to no more than 2,000 
25 kilowatts. 
26 "Energy efficiency" means measures that reduce the amount 
 
 
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1of electricity or natural gas required to achieve a given end 
2use. "Energy efficiency" also includes measures that reduce the 
3total Btus of electricity and natural gas needed to meet the 
4end use or uses and measures that decrease the heat rate in the 
5generation of electricity. 
6 "Electric utility" has the same definition as found in 
7Section 16-102 of the Public Utilities Act.
8 "Facility" means an electric generating unit or a 
9co-generating unit that produces electricity along with 
10related equipment necessary to connect the facility to an 
11electric transmission or distribution system.
12 "Governmental aggregator" means one or more units of local 
13government that individually or collectively procure 
14electricity to serve residential retail electrical loads 
15located within its or their jurisdiction.
16 "Local government" means a unit of local government as 
17defined in Section 1 of Article VII of the Illinois 
18Constitution.
19 "Municipality" means a city, village, or incorporated 
20town.
21 "Person" means any natural person, firm, partnership, 
22corporation, either domestic or foreign, company, association, 
23limited liability company, joint stock company, or association 
24and includes any trustee, receiver, assignee, or personal 
25representative thereof.
26 "Project" means the planning, bidding, and construction of 
 
 
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1a facility.
2 "Public utility" has the same definition as found in 
3Section 3-105 of the Public Utilities Act.
4 "Real property" means any interest in land together with 
5all structures, fixtures, and improvements thereon, including 
6lands under water and riparian rights, any easements, 
7covenants, licenses, leases, rights-of-way, uses, and other 
8interests, together with any liens, judgments, mortgages, or 
9other claims or security interests related to real property.
10 "Renewable energy credit" means a tradable credit that 
11represents the environmental attributes of a certain amount of 
12energy produced from a renewable energy resource.
13 "Renewable energy resources" includes energy and its 
14associated renewable energy credit or renewable energy credits 
15from wind, solar thermal energy, photovoltaic cells and panels, 
16biodiesel, anaerobic digestion, crops and untreated and 
17unadulterated organic waste biomass, tree waste, hydropower 
18that does not involve new construction or significant expansion 
19of hydropower dams, and other alternative sources of 
20environmentally preferable energy. For purposes of this Act, 
21landfill gas produced in the State is considered a renewable 
22energy resource. "Renewable energy resources" does not include 
23the incineration or burning of tires, garbage, general 
24household, institutional, and commercial waste, industrial 
25lunchroom or office waste, landscape waste other than tree 
26waste, railroad crossties, utility poles, or construction or 
 
 
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1demolition debris, other than untreated and unadulterated 
2waste wood.
3 "Revenue bond" means any bond, note, or other evidence of 
4indebtedness issued by the Authority, the principal and 
5interest of which is payable solely from revenues or income 
6derived from any project or activity of the Agency.
7 "Sequester" means permanent storage of carbon dioxide by 
8injecting it into a saline aquifer, a depleted gas reservoir, 
9or an oil reservoir, directly or through an enhanced oil 
10recovery process that may involve intermediate storage, 
11regardless of whether these activities are conducted by a clean 
12coal facility, a clean coal SNG facility, a clean coal SNG 
13brownfield facility, or a party with which a clean coal 
14facility, clean coal SNG facility, or clean coal SNG brownfield 
15facility has contracted for such purposes. 
16 "Sourcing agreement" means (i) in the case of an electric 
17utility, an agreement between the owner of a clean coal 
18facility and such electric utility, which agreement shall have 
19terms and conditions meeting the requirements of paragraph (3) 
20of subsection (d) of Section 1-75, (ii) in the case of an 
21alternative retail electric supplier, an agreement between the 
22owner of a clean coal facility and such alternative retail 
23electric supplier, which agreement shall have terms and 
24conditions meeting the requirements of Section 16-115(d)(5) of 
25the Public Utilities Act, and (iii) in case of a gas utility, 
26an agreement between the owner of a clean coal SNG brownfield 
 
 
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1facility and the gas utility, which agreement shall have the 
2terms and conditions meeting the requirements of subsection 
3(h-1) of Section 9-220 of the Public Utilities Act. 
4 "Substitute natural gas" or "SNG" means a gas manufactured 
5by gasification of hydrocarbon feedstock, which is 
6substantially interchangeable in use and distribution with 
7conventional natural gas. 
8 "Total resource cost test" or "TRC test" means a standard 
9that is met if, for an investment in energy efficiency or 
10demand-response measures, the benefit-cost ratio is greater 
11than one. The benefit-cost ratio is the ratio of the net 
12present value of the total benefits of the program to the net 
13present value of the total costs as calculated over the 
14lifetime of the measures. A total resource cost test compares 
15the sum of avoided electric utility costs, representing the 
16benefits that accrue to the system and the participant in the 
17delivery of those efficiency measures, as well as other 
18quantifiable societal benefits, including avoided natural gas 
19utility costs, to the sum of all incremental costs of end-use 
20measures that are implemented due to the program (including 
21both utility and participant contributions), plus costs to 
22administer, deliver, and evaluate each demand-side program, to 
23quantify the net savings obtained by substituting the 
24demand-side program for supply resources. In calculating 
25avoided costs of power and energy that an electric utility 
26would otherwise have had to acquire, reasonable estimates shall 
 
 
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1be included of financial costs likely to be imposed by future 
2regulations and legislation on emissions of greenhouse gases.

3(Source: P.A. 97-96, eff. 7-13-11; 97-239, eff. 8-2-11; 97-491, 
4eff. 8-22-11; 97-616, eff. 10-26-11; 97-813, eff. 7-13-12; 
598-90, eff. 7-15-13.)



6 Section 99. Effective date. This Act takes effect upon 
7becoming law.