Long-Term Renewable Resources Procurement Plan

1 Long-Term Renewable Resources Procurement plan August 6, 2018 Long-Term Renewable Resources Procurement plan Final plan Prepared to conform with the Illinois Commerce Commission s Final Order in Docket No. 17-0838, dated April 3, 2018, and Amendatory Order dated May 2, 2018 August 6, 2018 Prepared in accordance with the Illinois Power Agency Act (20 ILCS 3855), and the Illinois Public Utilities Act (220 ILCS 5) Renewable Resources Long-Term Renewable Resources Procurement plan August 6, 2018 i Table of Contents 1. Introduction .. 1 Changing the RPS Planning Framework .. 2 plan Organization .. 3 Action plan .. 4 2. Legislative/Regulatory Requirements of the plan .. 5 Renewable Energy Resource Procurement Prior to Public Act 99-0906 .. 5 Original RPS Eligible Retail Customer Load .. 5 Original RPS Hourly Pricing Customers .. 6 Original RPS ARES Compliance.

2 6 Public Act 99-0906 .. 9 Legislative Findings .. 10 Changes to the RPS .. 11 New Concepts and terms .. 11 Long-Term Renewable Resources Procurement plan .. 12 plan Requirements .. 12 Items Not Included in Long-Term Renewable Resource Procurement plan .. 18 plan Development and Approval .. 18 plan Updates .. 20 The RPS and Percentage-Based Goals of the RPS .. 21 Load Applicable to RPS Goals .. 21 Eligible Projects for the Illinois RPS .. 22 Compliance Mechanism: RECs vs. Renewable Energy Resources .. 25 RPS Funding and Rate Impact Cap .. 26 Employment Opportunities .. 27 Quantitative New Build Targets of the RPS .. 27 Quantitative Procurement Requirements .. 27 New wind project and new photovoltaic project Definition .. 28 Initial Forward 29 Subsequent Forward Procurements .. 30 Balancing Expected Wind RECs vs. Solar RECs.

3 30 Adjustable Block & Community Renewable Generation Programs .. 31 Adjustable Block Program .. 31 Community Renewable Generation Program .. 35 Illinois Solar for All Program .. 35 Illinois Solar for All Overview .. 36 Illinois Solar for All Sub-programs .. 38 Illinois Solar for All Additional Requirements .. 41 Illinois Solar for All Third-party Program Administrator .. 42 3. RPS Goals, Targets, and Budgets .. 44 Statewide Goals and Allocation of Cost and RECs from RPS Procurements to Each Utility 45 Impact of the Phase out of Alternative Retail Electric Supplier RPS Obligations .. 46 Section 1-75(c)(1)(H)(i) ARES Option to Supply RECs for their Retail Customers .. 46 MidAmerican Volumes .. 48 Cost Cap and Cost Recovery .. 48 RPS Compliance Procurement Priorities .. 49 Wind/Solar Matching Requirement and Solar Split .. 50 REC Portfolio .. 51 Existing REC Portfolios - RECs Already Under Contract.

4 51 Long-Term Renewable Resources Procurement plan August 6, 2018 ii Initial Forward Procurement .. 52 Statewide REC Portfolio .. 53 Loads, RPS Goals and Targets, and REC Gaps .. 54 Applicable Retail Customer Load .. 54 RPS Goals and Targets .. 54 Overall REC Procurement Targets (REC Gaps) .. 55 Procurement Targets to Meet Specific Wind-Solar Requirement and Overall RPS Targets57 RPS Budget .. 57 Utilities Budgets .. 58 Summary of REC Procurement Targets and RPS Budgets .. 61 Alternative Compliance Payment Funds Held by the 61 Impact of RPS Budget on Procurement Volumes .. 62 4. Renewable Energy Credit Eligibility .. 64 Adjacent State Requirement .. 64 Public Interest Criteria .. 66 Application Process .. 72 Cost Recovery Requirement .. 73 5. Competitive Procurement Schedule .. 76 Statutory Requirements .. 77 Background on past REC Procurements conducted by the IPA.

5 78 Updates to the Agency s Competitive Procurement Approach .. 79 Revised REC Eligibility .. 80 Credit Requirements .. 81 Benchmarks .. 81 Procurements for RECs from New Projects vs. RECs to Meet Annual 82 First Subsequent Forward Procurement .. 85 Brownfield Site Forward Procurement .. 87 Other Procurements to Meet RPS Targets .. 88 Photovoltaic Forward Procurement .. 89 Second Subsequent Forward Procurement .. 90 Other Renewables 15-Year Forward Procurement .. 91 Community Renewable Generation Program Forward Procurement .. 92 Spot Procurements .. 94 Consideration of Potential Procurements after 2019 and Through 2030 .. 96 6. Adjustable Block 97 Background .. 97 Lessons From Other Jurisdictions .. 98 Managing Initial Demand .. 98 Block Structure .. 99 Transition between Blocks .. 101 REC Pricing Model .. 103 Adjustments and Adders.

6 107 Size Category Adjustments .. 107 Co-location of Distributed Generation Systems .. 108 Community Solar .. 108 Adders to Adjust for Changing System Revenue .. 109 Payment terms .. 110 Contracts .. 111 Adjustments to Blocks and Prices .. 112 Long-Term Renewable Resources Procurement plan August 6, 2018 iii Net Metering Cap Adjustment .. 113 Smart Inverter Rebate .. 114 Federal Solar Investment Tax Credit Adjustment .. 114 Tariffs on Foreign Photovoltaic Modules and Cells .. 115 Approved Vendors .. 117 Program Administrator .. 120 Program Launch .. 121 Project Requirements .. 121 Technical System Requirements .. 121 Metering Requirements .. 122 Customer Information Requirements/Consumer Protections .. 123 Systems Energized Prior to Finalization of Consumer Protection Requirements .. 126 Community Solar .. 127 Monitoring of Consumer Complaints.

7 127 Application Process .. 128 Batches .. 128 Systems below 25 kW .. 129 Batch Size .. 129 Batch Review .. 130 Converting System Size into REC Quantities .. 130 Batch Contract Approval .. 131 Project Development Timeline and Extensions .. 132 Development Time Allowed .. 132 Extensions .. 132 Project Completion and Energization .. 133 Additional Requirements for Community Solar Projects .. 134 REC Delivery .. 135 Ongoing Performance Requirements .. 135 Credit Requirements .. 136 Options to Reduce REC Delivery Obligations .. 137 Annual Report .. 138 7. Community Renewable Generation Projects .. 140 Statutory Overview .. 140 Eligible Generating Technologies and Procurement /Program Eligibility .. 143 Co-location of Projects .. 143 Co-location Standard .. 144 Eligibility of Projects Located in Rural Electric Cooperatives and Municipal Utilities.

8 146 Types of Community Renewable Generation Projects .. 148 Subscriber Requirements .. 149 Small Subscriber Participation .. 149 Marketing to Small Subscribers .. 150 Marketing Claims Related to the Ownership of RECs and Community Renewable Generation Subscriptions .. 153 Utility Responsibilities .. 154 8. Illinois Solar for All Program .. 156 Overview .. 156 Design Considerations .. 156 Relationship with the Adjustable Block Program .. 156 Economic Benefits .. 157 Program Launch .. 158 Long-Term Renewable Resources Procurement plan August 6, 2018 iv Funding and Budget .. 159 Renewable Energy Resources Fund Funding Available .. 159 Utilities Annual Funding Available .. 160 Section 16-108(k) Funding .. 161 Setting Budgets .. 162 Payment Structure .. 163 164 Setting Incentive Levels .. 165 Low-Income Distributed Generation Incentive.

9 166 Low-Income Community Solar Project Initiative .. 168 Incentives for Non-Profits and Public Facilities .. 170 Low-Income Community Solar Pilot Projects .. 171 Providing Guidance and Education .. 173 Illinois Solar for All Program 173 Quality Assurance .. 175 Coordination with Job Training Programs .. 175 Additional Requirements for Approved Vendors .. 177 Application Process .. 178 Customer Eligibility .. 179 Income Guidelines .. 179 Determining Income Eligibility .. 182 Consumer Protections .. 183 Environmental Justice Communities .. 184 Definitions .. 184 Proposed Approach for Defining Environmental Justice 187 Environmental Justice Community Designations .. 189 Environmental Justice Communities 25% Goal .. 189 Program Changes .. 189 190 Tables Table 3-1: Utility REC Cost Allocations .. 45 Table 3-2. REC Procurement Cost Cap Rate by Utility.

10 49 Table 3-3. Ameren Illinois Existing REC Portfolio .. 51 Table 3-4. ComEd Existing REC Portfolio .. 52 Table 3-5. MidAmerican Existing REC Portfolio .. 52 Table 3-6. Initial Forward Procurement RECs .. 53 Table 3-7. Statewide REC Portfolio .. 53 Table 3-8. Retail Customer Load Applicable to the Compliance 54 Table 3-9. Statewide RPS Goals and Targets .. 55 Table 3-10. Statewide Overall REC Gap .. 55 Table 3-11. Statewide REC Portfolio and Minimum REC Procurement Targets .. 57 Table 3-12. Ameren Illinois RPS Budget .. 59 Table 3-13. ComEd RPS Budget .. 60 Table 3-14. MidAmerican RPS Budget .. 60 Table 3-15. Statewide RPS Budget .. 60 Long-Term Renewable Resources Procurement plan August 6, 2018 v Table 3-16. Statewide REC Gap and Available RPS Budget .. 61 Table 4-1: Natural Gas-Fired Generation Emissions Rates .. 67 Table 4-2: Wind Duration/Direction Factors .. 68 Table 5-1: 2018 and 2019 Forward Procurements Summary.