§ 1-78 — Feedstock procurement plan; feedstock procurement process

Illinois § 1-78

• Jurisdiction: Illinois
• Topic: GOVERNMENT
• Ch. 20: EXECUTIVE BRANCH
• Act 20 ILCS 3855/: Illinois Power Agency Act.
• Art.: Article 1 - The Illinois Power Agency Act

Text

(a) A feedstock procurement plan shall at least every 5 years beginning in 2015 be prepared for the clean coal SNG brownfield facility based on the clean coal SNG brownfield facility's projection of feedstock usage and ratios, and consistent with the applicable requirements of the Public Utilities Act and this Act. The plan shall specifically identify the wholesale feedstock products to be procured following plan approval and shall follow all the requirements set forth in this Act, the Public Utilities Act, and all applicable State and federal laws, statutes, rules, or regulations, as well as Commission orders. Nothing in this Section precludes consideration of contracts longer than 5 years and related forecast data. Any feedstock procurement occurring in accordance with this plan shall be competitively bid through a request for proposals process. Approval and implementation of the feedstock procurement plan shall be subject to review and approval by the Commission according to the provisions set forth in this Section. A feedstock procurement plan shall include each of the following components: (1) Daily load analysis. This analysis shall include: (A) multi-year historical analysis of hourly loads; and (B) known or projected changes to future loads. (2) Determination of the fuel specifications required for the clean coal SNG brownfield facility, including: (A) coal and petroleum coke mix, as set by the clean coal SNG brownfield facility with coal comprising at least 50% of the total feedstock over the term of any sourcing agreement unless the facility reasonably determines that it is necessary to use additional petroleum coke to deliver additional consumer savings, in which case the facility shall use coal for at least 35% of the total feedstock over the term of any sourcing agreement; (B) volume of each feedstock required; (C) quality standards of each feedstock; (D) delivery requirements, including cost implications; and (E) technical specifications of the clean coal SNG brownfield facility for its feedstocks. (b) The feedstock procurement process shall be administered by a feedstock procurement administrator and monitored by a feedstock procurement monitor. (1) The feedstock procurement administrator shall: (A) design the final feedstock procurement process in accordance with subsection (d) of this Section following Commission approval of the feedstock procurement plan; (B) develop feedstock benchmarks in accordance with subsection (d)(3) to be used to evaluate bids; these benchmarks shall be submitted to the Commission for review and approval on a confidential basis prior to the feedstock procurement event; (C) serve as the interface between the clean coal SNG brownfield facility and coal and petroleum coke suppliers; (D) manage the bidder prequalification and registration process; (E) obtain the facility's agreement to the final form of all supply contracts and credit collateral agreements; (F) administer the request for feedstock proposals process; (G) have the discretion to negotiate to determine whether bidders are willing to lower the price of bids that meet the benchmarks approved by the Commission; any post-bid negotiations with bidders shall be limited to price only and shall be completed within 24 hours after opening the sealed bids and shall be conducted in a fair and unbiased manner; in conducting the negotiations, there shall be no disclosure of any information derived from proposals submitted by competing bidders; if information is disclosed to any bidder, it shall be provided to all competing bidders; (H) maintain confidentiality of supplier and bidding information in a manner consistent with all applicable laws, rules, regulations, and tariffs; (I) submit a confidential report to the Commission recommending acceptance or rejection of bids; (J) notify the facility of contract counterparties and contract specifics; and (K) administer related contingency feedstock procurement events. (2) The feedstock procurement monitor, who shall be retained by the Commission, shall: (A) monitor interactions among the feedstock procurement administrator, suppliers, and the facility; (B) monitor and report to the Commission on the progress of the feedstock procurement process; (C) provide an independent, confidential report to the Commission regarding the results of the feedstock procurement event; (D) preserve the confidentiality of supplier and bidding information in a manner consistent with all applicable laws, rules, regulations, and tariffs; (E) provide expert advice to the Commission and consult with the feedstock procurement administrator regarding issues related to feedstock procurement process design, rules, protocols, and policy-related matters; (F) consult with the feedstock procurement administrator regarding the development and use of benchmark criteria, standard form contracts, credit policies, and bid documents; and (G) assess compliance with the procurement plans approved by the Commission. (c) The feedstock planning process shall be conducted as follows: (1) Beginning in 2015, the clean coal SNG brownfield facility shall annually provide a range of feedstock requirement forecasts to the Agency by May 15 of each year, or such other date as may be required by the Commission or Agency. The feedstock requirement forecasts shall cover the 5-year feedstock procurement planning period for the next feedstock procurement plan, or such other longer period that the Agency or the Commission may require and shall include daily data representing a high-load, low-load, and expected-load scenario for the load of the utilities required to enter into sourcing agreements with the clean coal SNG brownfield facility. The utility shall provide supporting data and assumptions for each of the scenarios. (2) Beginning in 2015, the Agency shall at least every 5 years prepare a feedstock procurement plan by June 15, or such other date as may be required by the Commission. The clean coal SNG brownfield facility also may submit a feedstock procurement plan. Each feedstock procurement plan shall identify the portfolio of feedstocks to be procured. Copies of each feedstock procurement plan shall be posted and made publicly available on the Agency's and Commission's websites, and copies of the Agency's feedstock procurement plan shall also be provided to the clean coal SNG brownfield facility. The clean coal SNG brownfield facility shall have 30 days following the date of posting to provide comment to the Agency on the feedstock procurement plan. Other interested entities also may comment on each feedstock procurement plan. All comments submitted to the Agency shall be specific, supported by data or other detailed analyses, and, if objecting to all or a portion of the feedstock procurement plan, accompanied by specific alternative wording or proposals. All comments shall be posted on the Agency's and Commission's websites. During this 30-day comment period, the Agency shall hold at least one public hearing for the purpose of receiving public comment on the procurement plan. Within 14 days following the end of the 30-day comment period, the clean coal SNG brownfield facility may revise its feedstock procurement plan, if any, and the Agency shall revise the feedstock procurement plan as necessary based on the comments received, and each shall file its feedstock procurement plan with the Commission, and post the feedstock procurement plan on the websites. (3) Within 5 days after the filing of a feedstock procurement plan, any person objecting to the feedstock procurement plan shall file an objection with the Commission. Within 10 days after the filing, the Commission shall determine whether a hearing is necessary. The Commission shall enter its order confirming or modifying a feedstock procurement plan within 90 days after the filing of the feedstock procurement plan by the Agency. (4) The Commission shall approve a feedstock procurement plan, including expressly the forecast used in the feedstock procurement plan, if the Commission determines that it will ensure adequate, reliable, and affordable feedstocks to the clean coal SNG brownfield facility at the lowest total cost over time, taking into account any benefits of price stability. (d) The feedstock procurement process shall include each of the following components: (1) Solicitation, prequalification, and registration of bidders. The feedstock procurement administrator shall disseminate information to potential bidders to promote a feedstock procurement event, notify potential bidders that the feedstock procurement administrator may enter into a post-bid price negotiation with bidders that meet the applicable benchmarks, provide supply requirements, and otherwise explain the competitive feedstock procurement process. In addition to such other publication as the feedstock procurement administrator determines is appropriate, this information shall be posted on the Agency's and the Commission's websites. The feedstock procurement administrator shall also administer the prequalification process, including evaluation of creditworthiness, compliance with feedstock procurement rules, and agreement to the standard form contract developed pursuant to paragraph (2) of this subsection (d). The feedstock procurement administrator shall then identify and register bidders to participate in the feedstock procurement event. (2) Standard contract forms and credit terms and instruments. The feedstock procurement administrator, in consultation with the clean coal SNG brownfield facility, gas utilities, the Commission, and other interested parties and subject to Commission oversight, shall develop and provide standard contract forms for the supplier contracts that meet generally accepted industry practices. Standard credit terms and instruments that meet generally accepted industry practices shall be similarly developed. The feedstock procurement administrator shall make available to the Commission all written comments it receives on the contract forms, credit terms, or instruments. If the feedstock procurement administrator cannot reach agreement with the applicable clean coal SNG brownfield facility as to the contract terms and conditions, then the feedstock procurement administrator must notify the Commission of any disputed terms and the Commission shall resolve the dispute. The terms of the contracts shall not be subject to negotiation by winning bidders and the bidders must agree to the terms of the contract in advance so that winning bids are selected solely on the basis of price. (3) Establishment of a market-based price benchmark. As part of the development of the feedstock procurement process, the feedstock procurement administrator, in consultation with the Commission staff, Agency staff, and the feedstock procurement monitor, shall establish benchmarks for evaluating the final prices in the contracts for each of the feedstocks that will be procured through the feedstock procurement process. The benchmarks shall be based on price data for similar feedstocks for the same delivery period and same delivery hub or other delivery hubs after adjusting for that difference. The price benchmarks may also be adjusted to take into account differences between the information reflected in the underlying data sources and the specific feedstocks and gasification feedstock procurement process being used to procure for the clean coal SNG brownfield facility. The benchmarks shall be confidential but shall be provided to, and shall be subject to, the Commission's review and approval prior to a feedstock procurement event. (4) Request for proposals. The feedstock procurement administrator shall design and issue a request for proposals to supply coal or petroleum coke in accordance with the clean coal SNG brownfield facility's usage plan, as approved by the Commission. The request for proposals shall set forth a procedure for sealed, binding commitment bidding with pay-as-bid settlement, and provision for selection of bids on the basis of price. (5) A plan for implementing contingencies in the event of supplier default or failure of the feedstock procurement process to fully meet the expected feedstock requirement due to insufficient supplier participation, Commission rejection of results, or any other cause. The plan must be specific to the clean coal SNG brownfield facility's feedstock specifications and requirements. The feedstock procurement process described in this subsection (d) is exempt from the requirements of the Illinois Procurement Code, pursuant to Section 20-10 of that Code. (e) Within 2 business days after opening the sealed bids, the feedstock procurement administrator shall submit a confidential report to the Commission. The report shall contain the results of the bidding for each of the feedstock types along with the feedstock procurement administrator's recommendation for the acceptance and rejection of bids based on the price benchmark criteria and other factors observed in the process. The feedstock procurement monitor also shall submit a confidential report to the Commission within 2 business days after opening the sealed bids. The report shall contain the feedstock procurement monitor's assessment of bidder behavior in the process, as well as an assessment of the feedstock procurement administrator's compliance with the feedstock procurement process and rules. The Commission shall review the confidential reports submitted by the feedstock procurement administrator and feedstock procurement monitor and shall accept or reject the recommendations of the feedstock procurement administrator within 2 business days after receipt of the reports. (f) Within 3 business days after the Commission decision approving the results of a feedstock procurement event, the clean coal SNG brownfield facility shall enter into binding contractual arrangements with the winning suppliers using standard form contracts. (g) The names of the successful bidders and the amount of feedstock to be delivered for each contract type and for each contract term shall be made available to the public at the time of Commission approval of a feedstock procurement event. The Commission, the procurement monitor, the feedstock procurement administrator, the Agency, and all participants in the feedstock procurement process shall maintain the confidentiality of all other supplier and bidding information in a manner consistent with all applicable laws, rules, regulations, and tariffs. Confidential information, including the confidential reports submitted by the feedstock procurement administrator and feedstock procurement monitor pursuant to subsection (e) of this Section, shall not be publicly available or discoverable by any party in any proceeding absent a compelling demonstration of need. The reports shall not be admissible in any proceeding other than one for law enforcement purposes. (h) Within 2 business days after a Commission decision approving the results of a feedstock procurement event or such other date as may be required by the Commission from time to time, the clean coal SNG brownfield facility shall file for informational purposes with the Commission its actual or estimated feedstock costs by utility customer reflecting the costs associated with the feedstock procurement. (i) The clean coal SNG brownfield facility shall pay for reasonable costs incurred by the Agency in administering the feedstock procurement events, which costs shall be included in the actual delivered fuel costs of the clean coal SNG brownfield facility. The Agency shall determine the amount owed for each feedstock procurement event, and the clean coal SNG brownfield facility shall pay that amount to the Agency within 30 days after being informed by the Agency of the amount owed. Those funds shall be deposited into the Illinois Power Agency Operations Fund, pursuant to Section 1-55 of this Act, to be used to reimburse expenses related to the feedstock procurement. (j) The Commission has the authority to adopt rules to carry out the provisions of this Section. For the public interest, safety, and welfare, the Commission also has the authority to adopt rules to carry out the provisions of this Section on an emergency basis. (k) On or before April 1 of each year, the Commission may hold an informal hearing for the purpose of receiving comments on the prior year's feedstock procurement process and any recommendations for change.

Legislative History

(Source: P.A. 97-96, eff. 7-13-11.)