HB2494 EngrossedLRB098 08122 JLS 38213 b



1 AN ACT concerning regulation.


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

3represented in the General Assembly:



4 Section 5. The Public Utilities Act is amended by changing 
5Section 19-140 as follows:

6 (220 ILCS 5/19-140)

7 Sec. 19-140. On-bill financing program; gas utilities.
8 (a) The Illinois General Assembly finds that Illinois homes 
9and businesses have the potential to save energy through 
10conservation and cost-effective energy efficiency measures. 
11Programs created pursuant to this Section will allow utility 
12customers to purchase cost-effective energy efficiency 
13measures, including measures set forth in a 
14Commission-approved energy efficiency and demand-response plan 
15under Section 8-104 of this Act and that are cost-effective as 
16that term is defined by that Section, with no required initial 
17upfront payment, and to pay the cost of those products and 
18services over time on their utility bill.
19 (b) Notwithstanding any other provision of this Act, a gas 
20utility serving more than 100,000 customers on January 1, 2009 
21shall offer a Commission-approved on-bill financing program 
22("program") that allows its retail customers who own a 
23residential single family home, duplex, or other residential 
 
 
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1building with 4 or less units, or condominium at which the gas 
2service is being provided (i) to borrow funds from a third 
3party lender in order to purchase gas energy efficiency 
4measures approved under the program for installation in such 
5home or condominium without any required upfront payment and 
6(ii) to pay back such funds over time through the gas utility's 
7bill. Based upon the process described in subsection (b-5) of 
8this Section, small commercial retail customers, as that term 
9is defined in Section 19-105 of this Act, who own the premises 
10at which gas service is being provided may be included in such 
11program. After receiving a request from a gas utility for 
12approval of a proposed program and tariffs pursuant to this 
13Section, the Commission shall render its decision within 120 
14days. If no decision is rendered within 120 days, then the 
15request shall be deemed to be approved.
16 (b-5) Within 30 days after the effective date of this 
17amendatory Act of the 96th General Assembly, the Commission 
18shall convene a workshop process during which interested 
19participants may discuss issues related to the program, 
20including program design, eligible gas energy efficiency 
21measures, vendor qualifications, and a methodology for 
22ensuring ongoing compliance with such qualifications, 
23financing, sample documents such as request for proposals, 
24contracts and agreements, dispute resolution, pre-installment 
25and post-installment verification, and evaluation. The 
26workshop process shall be completed within 150 days after the 
 
 
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1effective date of this amendatory Act of the 96th General 
2Assembly.
3 (c) Not later than 60 days following completion of the 
4workshop process described in subsection (b-5) of this Section, 
5each gas utility subject to subsection (b) of this Section 
6shall submit a proposed program to the Commission that contains 
7the following components:
8  (1) A list of recommended gas energy efficiency 
9 measures that will be eligible for on-bill financing. An 
10 eligible gas energy efficiency measure ("measure") shall 
11 be defined by the following:
12   (A) The measure would be applied to or replace gas 
13 energy-using equipment; and
14   (B) Either (i) application Application of the 
15 measure to equipment and systems will have estimated 
16 gas savings (determined by rates in effect at the time 
17 of purchase), that are sufficient to cover the costs of 
18 implementing the measures, including finance charges 
19 and any program fees not recovered pursuant to 
20 subsection (f) of this Section. To assist the gas 
21 utility in identifying or approving measures, the 
22 utility may consult with the Department of Commerce and 
23 Economic Opportunity, as well as with retailers, 
24 technicians and installers of gas energy efficiency 
25 measures and energy auditors (collectively "vendors"); 
26 or (ii) the measure is included in a 
 
 
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1 Commission-approved energy efficiency and 
2 demand-response plan under Section 8-104 of this Act 
3 and is cost-effective as that term is defined by that 
4 Section.
5  (2) The gas utility shall issue a request for proposals 
6 ("RFP") to lenders for purposes of providing financing to 
7 participants to pay for approved measures. The RFP criteria 
8 shall include, but not be limited to, the interest rate, 
9 origination fees, and credit terms. The utility shall 
10 select the winning bidders based on its evaluation of these 
11 criteria, with a preference for those bids containing the 
12 rates, fees, and terms most favorable to participants.
13  (3) The utility shall work with the lenders selected 
14 pursuant to the RFP process, and with vendors, to establish 
15 the terms and processes pursuant to which a participant can 
16 purchase eligible gas energy efficiency measures using the 
17 financing obtained from the lender. The vendor shall 
18 explain and offer the approved financing packaging to those 
19 customers identified in subsection (b) of this Section and 
20 shall assist customers in applying for financing. As part 
21 of such process, vendors shall also provide to participants 
22 information about any other incentives that may be 
23 available for the measures.
24  (4) The lender shall conduct credit checks or undertake 
25 other appropriate measures to limit credit risk, and shall 
26 review and approve or deny financing applications 
 
 
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1 submitted by customers identified in subsection (b) of this 
2 Section. Following the lender's approval of financing and 
3 the participant's purchase of the measure or measures, the 
4 lender shall forward payment information to the gas 
5 utility, and the utility shall add as a separate line item 
6 on the participant's utility bill a charge showing the 
7 amount due under the program each month.
8  (5) A loan issued to a participant pursuant to the 
9 program shall be the sole responsibility of the 
10 participant, and any dispute that may arise concerning the 
11 loan's terms, conditions, or charges shall be resolved 
12 between the participant and lender. Upon transfer of the 
13 property title for the premises at which the participant 
14 receives gas service from the utility or the participant's 
15 request to terminate service at such premises, the 
16 participant shall pay in full its gas utility bill, 
17 including all amounts due under the program, provided that 
18 this obligation may be modified as provided in subsection 
19 (g) of this Section. Amounts due under the program shall be 
20 deemed amounts owed for residential and, as appropriate, 
21 small commercial gas service.
22  (6) The gas utility shall remit payment in full to the 
23 lender each month on behalf of the participant. In the 
24 event a participant defaults on payment of its gas utility 
25 bill, the gas utility shall continue to remit all payments 
26 due under the program to the lender, and the utility shall 
 
 
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1 be entitled to recover all costs related to a participant's 
2 nonpayment through the automatic adjustment clause tariff 
3 established pursuant to Section 19-145 of this Act. In 
4 addition, the gas utility shall retain a security interest 
5 in the measure or measures purchased under the program, and 
6 the utility retains its right to disconnect a participant 
7 that defaults on the payment of its utility bill.
8  (7) The total outstanding amount financed under the 
9 program shall not exceed $2.5 million for a gas utility or 
10 gas utilities under a single holding company, provided that 
11 the gas utility or gas utilities may petition the 
12 Commission for an increase in such amount.
13 (d) A program approved by the Commission shall also include 
14the following criteria and guidelines for such program:
15  (1) guidelines for financing of measures installed 
16 under a program, including, but not limited to, RFP 
17 criteria and limits on both individual loan amounts and the 
18 duration of the loans;
19  (2) criteria and standards for identifying and 
20 approving measures;
21  (3) qualifications of vendors that will market or 
22 install measures, as well as a methodology for ensuring 
23 ongoing compliance with such qualifications;
24  (4) sample contracts and agreements necessary to 
25 implement the measures and program; and
26  (5) the types of data and information that utilities 
 
 
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1 and vendors participating in the program shall collect for 
2 purposes of preparing the reports required under 
3 subsection (g) of this Section.
4 (e) The proposed program submitted by each gas utility 
5shall be consistent with the provisions of this Section that 
6define operational, financial, and billing arrangements 
7between and among program participants, vendors, lenders, and 
8the gas utility.
9 (f) A gas utility shall recover all of the prudently 
10incurred costs of offering a program approved by the Commission 
11pursuant to this Section, including, but not limited to, all 
12start-up and administrative costs and the costs for program 
13evaluation. All prudently incurred costs under this Section 
14shall be recovered from the residential and small commercial 
15retail customer classes eligible to participate in the program 
16through the automatic adjustment clause tariff established 
17pursuant to Section 8-104 of this Act.
18 (g) An independent evaluation of a program shall be 
19conducted after 3 years of the program's operation. The gas 
20utility shall retain an independent evaluator who shall 
21evaluate the effects of the measures installed under the 
22program and the overall operation of the program, including, 
23but not limited to, customer eligibility criteria and whether 
24the payment obligation for permanent gas energy efficiency 
25measures that will continue to provide benefits of energy 
26savings should attach to the meter location. As part of the 
 
 
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1evaluation process, the evaluator shall also solicit feedback 
2from participants and interested stakeholders. The evaluator 
3shall issue a report to the Commission on its findings no later 
4than 4 years after the date on which the program commenced, and 
5the Commission shall issue a report to the Governor and General 
6Assembly including a summary of the information described in 
7this Section as well as its recommendations as to whether the 
8program should be discontinued, continued with modification or 
9modifications or continued without modification, provided that 
10any recommended modifications shall only apply prospectively 
11and to measures not yet installed or financed.
12 (h) A gas utility offering a Commission-approved program 
13pursuant to this Section shall not be required to comply with 
14any other statute, order, rule, or regulation of this State 
15that may relate to the offering of such program, provided that 
16nothing in this Section is intended to limit the gas utility's 
17obligation to comply with this Act and the Commission's orders, 
18rules, and regulations, including Part 280 of Title 83 of the 
19Illinois Administrative Code.
20 (i) The source of a utility customer's gas supply shall not 
21disqualify a customer from participation in the utility's 
22on-bill financing program. Customers of alternative gas 
23suppliers may participate in the program under the same terms 
24and conditions applicable to the utility's supply customers.

25(Source: P.A. 96-33, eff. 7-10-09.)