§ 16-111.10 — Equitable Energy Upgrade Program

Illinois § 16-111.10

• Jurisdiction: Illinois
• Topic: REGULATION
• Ch. 220: UTILITIES
• Act 220 ILCS 5/: Public Utilities Act.
• Art.: Article XVI - Electric Service Customer Choice And Rate Relief Law Of 1997

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(a) The General Assembly finds and declares that Illinois homes and businesses can contribute to the creation of a clean energy economy, conservation of natural resources, and reliability of the electricity grid through the installation of cost-effective renewable energy generation, energy efficiency and demand response equipment, and energy storage systems. Further, a large portion of Illinois residents and businesses that would benefit from the installation of energy efficiency, storage, and renewable energy generation systems are unable to purchase systems due to capital or credit barriers. This State should pursue options to enable many more Illinoisans to access the health, environmental, and financial benefits of new clean energy technology. (b) As used in this Section: "Commission" means the Illinois Commerce Commission. "Energy project" means renewable energy generation systems, including solar projects, energy efficiency upgrades, energy storage systems, demand response equipment, or any combination thereof. "Fund" means the Clean Energy Jobs and Justice Fund established in the Clean Energy Jobs and Justice Fund Act. "Program" means the Equitable Energy Upgrade Program established under subsection (c). "Utility" means electric public utilities providing services to 500,000 or more customers under this Act. (c) The Commission shall open an investigation into and direct all electric public utilities in this State to adopt an Equitable Energy Upgrade Program that permits customers to finance the construction of energy projects through an optional tariff payable directly through their utility bill, modeled after the Pay As You Save system, developed by the Energy Efficiency Institute. The Program model shall enable utilities to offer to make investments in energy projects to customer properties with low-cost capital and use an opt-in tariff to recover the costs. The Program shall be designed to provide customers with immediate financial savings if they choose to participate. The Program shall allow residential electric utility customers that own the property, or renters that have permission of the property owner, for which they subscribe to utility service to agree to the installation of an energy project. The Program shall ensure: (1) eligible projects do not require upfront payments; however, customers may pay down the costs for projects with a payment to the installing contractor in order to qualify projects that would otherwise require upfront payments; (2) eligible projects have sufficient estimated savings and estimated life span to produce significant, immediate net savings; (3) participants shall agree the utility can recover its costs for the projects at their location by paying for the project through an optional tariff directly through the participant's electricity bill, allowing participants to benefit from installation of energy projects without traditional loans; (4) accessibility by lower-income residents and environmental justice community residents; and (5) the utility must ensure that customers who are interested in participating are notified that if they are income qualified, they may also be eligible for the Percentage of Income Payment Plan program and free energy improvements through other programs and provide contact information. (d) The Commission shall establish Program guidelines with the anticipated schedule of Program availability as follows: (1) Year 1: Beginning in the first year of operation, each utility with greater than 100,000 retail customers is required to obtain low-cost capital of at least $20,000,000 annually for investments in energy projects. (2) Year 2: Beginning in the second year of operation, each utility with greater than 100,000 retail customers is required to obtain low-cost capital for investments in energy projects of at least $40,000,000 annually. (3) Year 3: Beginning in the third year of operation, each utility with greater than 100,000 retail customers is required to obtain low-cost capital for investments in as many systems as customers demand, subject to available capital provided by the utility, State, or other lenders. (e) In the design of the Program, the Commission shall: (1) Within 270 days after the effective date of this amendatory Act of the 102nd General Assembly, convene a workshop during which interested participants may discuss issues and submit comments related to the Program. (2) Establish Program guidelines for implementation of the Program in accordance with the Pay As You Save Essential Elements and Minimum Program Requirements that electric utilities must abide by when implementing the Program. Program guidelines established by the Commission shall include the following elements: (A) The Commission shall establish conditions under which utilities secure capital to fund the energy projects. The Commission may allow utilities to raise capital independently, work with third-party lenders to secure the capital for participants, or a combination thereof. Any process the Commission approves must use a market mechanism to identify the least costly sources of capital funds so as to pass on maximum savings to participants. The State or the Clean Energy Jobs and Justice Fund may also provide capital for the Program. (B) Customer protection guidelines should be designed consistent with Pay As You Save Essential Elements and Minimum Program Requirements. (C) The Commission shall establish conditions by which utilities may connect Program participants to energy project vendors. In setting conditions for connection, the Commission may prioritize vendors that have a history of good relations with the State, including vendors that have hired participants from State-created job training programs. (D) Guarantee that conservative estimates of financial savings will immediately and significantly exceed Program costs for Program participants. (f) Within 120 days after the Commission releases the Program conditions established under this Section, each utility subject to the requirements of this Section shall submit an informational filing to the Commission that describes its plan for implementing the provisions of this Section. If the Commission finds that the submission does not properly comply with the statutory or regulatory requirements of the Program, the Commission may require that the utility make modifications to its filing. (g) An independent process evaluation shall be conducted after one year of the Program's operation. An independent impact evaluation shall be conducted after 3 years of operation, excluding one-time startup costs and results from the first 12 months of the Program. The Commission shall convene an advisory council of stakeholders, including representation of low-income and environmental justice community members to make recommendations in response to the findings of the independent evaluation. (h) The Program shall be designed using the Pay As You Save system guidelines to be cost-effective for customers. Only projects that are deemed to be cost-effective and can be reasonably expected to ensure customer savings are eligible for funding through the Program, unless, as specified in paragraph (1) of subsection (c), customers able to make upfront copayments to installers buy down the cost of projects so it can be deemed cost-effective. (i) Eligible customers must be: (1) property renters with permission of the property owner; or (2) property owners. (j) The calculation of project cost-effectiveness shall be based upon the Pay As You Save system requirements. (1) The calculation of cost-effectiveness must be conducted by an objective process approved by the Commission and based on rates in effect at the time of installation. (2) A project shall be considered cost-effective only if it is estimated to produce significant immediate net savings, not counting copayments voluntarily made by customers. The Commission may establish guidelines by which this required savings is estimated. (k) The Program should be modeled after the Pay As You Save system, by which Program participants finance energy projects using the savings that the energy project creates with a tariffed on-bill program. Eligible projects shall not create personal debt for the customer, result in a lien in the event of nonpayment, or require customers to pay monthly charges for any upgrade that fails and is not repaired within 21 days. The utility may restart charges once the upgrade is repaired and functioning and extend the term of payments to recover its costs for missed payments and deferred cost recovery, providing the upgrade continues to function. (l) Any energy project that is defective or damaged due to no fault of the participant must be either replaced or repaired with parts that meet industry standards at the cost of the utility or vendor, as specified by the Commission, and charges shall be suspended until repairs or replacement is completed. The Commission may establish, increase, or replace the requirements imposed in this subsection. The Commission may determine that this responsibility is best handled by participating project vendors in the form of insurance, contractual guarantees, or other mechanisms, and issue rules detailing this requirement. Customers shall not be charged monthly payments for upgrades that are no longer functioning. (m) In the event of nonpayment, the remaining balance due to pay off the system shall remain with the utility meter at an upgraded location. The Commission shall establish conditions subject to this constraint in the event of nonpayment that are in accordance with the Pay As You Save system. (n) If the demand by utility customers exceeds the Program capital supply in a given year, utilities shall ensure that 50% of participants are: (1) customers in neighborhoods where a majority of households make 150% or less of area median income; or (2) residents of environmental justice communities. (o) Utilities shall endeavor to inform customers about the availability of the Program, their potential eligibility for participation in the Program, and whether they are likely to save money on the basis of an estimate conducted using variables consistent with the Program that the utility has at its disposal. The Commission may establish guidelines by which utilities must abide by this directive and alternatives if the Commission deems utilities' efforts as inadequate. (p) Subject to Commission specifications under subsection (c), each utility shall work with certified project vendors selected using a request for proposals process to establish the terms and processes under which a utility can install eligible renewable energy generation and energy storage systems using the capital to fit the Equitable Energy Upgrade model. The certified project vendor shall explain and offer the approved upgrades to customers and shall assist customers in applying for financing through the Program. As part of the process, vendors shall also provide participants with information about any other relevant incentives that may be available. (q) An electric utility shall recover all of the prudently incurred costs of offering a program approved by the Commission under this Section. For investor-owned utilities, shareholder incentives will be proportional to meeting Commission approved thresholds for the number of customers served and the amount of its investments in those locations. (r) The Commission shall adopt all rules necessary for the administration of this Section.

Legislative History

(Source: P.A. 102-662, eff. 9-15-21.)