Section 710.40  Grantee and Project Eligibility Requirements

 

a)         The following types of entities are eligible to apply for a grant award under the program:

 

1)         An owner of an electric generating facility that meets the requirements listed in subsections (b) and (c) and that:

 

A)        has an active GATA registration and is qualified on the GATA Grantee Portal (https://grants.illinois.gov/portal/) at the time the application is submitted; and

 

B)        is considered a regarded entity by the Internal Revenue Service (26 U.S.C. 1361(b)(3)) for federal income tax purposes.

 

2)         A subsidiary or special purpose entity of an owner of an electric generating unit, but only if this subsidiary or entity:

 

A)        includes with its application a written statement from the owner of the electric generating unit that demonstrates the requirements of subsections (b) and (c) will be met and describes the applicant's relationship to the owner company;

 

B)        provides documentation of the corporate structure demonstrating the applicant's relationship to the owner of the electric generating unit;

 

C)        provides documentation showing it will meet the requirements listed in subsection (c);

 

D)        has an active GATA registration and is qualified on the GATA Grantee Portal at the time the application is submitted;

 

E)        is considered a regarded entity by the Internal Revenue Service for federal income tax purposes; and

 

F)         can meet all requirements of 20 ILCS 3855/1-75(c-5)(10)(C) as if it were the owner of an electric generating unit.

 

3)         An affiliate of a company that owns an electric generating unit, but only if the affiliate applicant:

 

A)        includes with its application a written statement from the owner company that demonstrates the requirements of subsections (b) and (c) will be met and describes the applicant's relationship to the owner company;

 

B)        provides documentation of the corporate structure demonstrating the applicant's relationship to the owner of the electric generating unit;

 

C)        meets the requirements listed in subsection (c);

 

D)        has an active GATA registration and is qualified on the GATA Grantee Portal at the time the application is submitted;

 

E)        is considered a regarded entity by the Internal Revenue Service for federal income tax purposes; and

 

F)         provides documentation that an entity with an ownership interest in the affiliate meets the requirements of 20 ILCS 3855/1-75(c-5)(10)(C).

 

b)         To qualify for a grant award, the electric generating facility site which is the subject of the application:

 

1)         must be located in the Midcontinent Independent System Operator, Inc. region in Illinois or in the PJM Interconnection, LLC region in Illinois;

 

2)         has, or had prior to retirement, an electric generating capacity of at least 150 megawatts at the site of the proposed energy storage facility;

 

3)         burns (or burned prior to retirement) coal as its primary source of fuel;

 

4)         was retired after January 1, 2016, if it is retired at the time of application;

 

5)         was at one time owned, in whole or in part, by a public utility as defined in Section 3-105 of the Public Utilities Act [220 ILCS 5/3-105];

 

6)         is not owned by:

 

A)        an electric cooperative as defined in Section 3-119 of the Public Utilities Act [220 ILCS 5/3-119]; or

 

B)        an entity described in subsection (b)(1) of Section 3-105 of the Public Utilities Act [220 ILCS 5/3-105(b)(1)]; or

 

C)        an association or consortium of or an entity owned by entities described in subsections (b)(6)(A) or (B); and

 

7)         has an owner of the electric generating facility that has not been selected by the Agency pursuant to 20 ILCS 3855/1-75(c-5) to enter into a contract to sell renewable energy credits to one or more electric utilities from a new renewable energy facility located or to be located at or adjacent to the site at which the electric generating facility is located.

 

c)         The proposed project must meet the following requirements:

 

1)         The proposed energy storage facility at the site will have energy storage capacity of at least 37 megawatts;

 

2)         The applicant commits to place the energy storage facility into commercial operation on either June 1, 2023, June 1, 2024, or June 1, 2025, with such date subject to adjustment as needed due to any delays in completing the grant contracting process, in finalizing interconnection agreements and in installing interconnection facilities, and in obtaining necessary governmental permits and approvals;

 

3)         The applicant agrees that the new energy storage facility will be constructed or installed by a qualified entity or entities consistent with the requirements of subsection (g) of Section 16-128A of the Public Utilities Act [220 ILCS 5/16-128A(g)] and any rules adopted under that Section;

 

4)         The applicant agrees that personnel operating the energy storage facility will have the requisite skills, knowledge, training, experience, and competence, which may be demonstrated by completion or current participation and ultimate completion by employees of an accredited or otherwise recognized apprenticeship program for the employee's particular craft, trade, or skill, including through training and education courses and opportunities offered by the applicant to employees of the coal-fueled electric generating facility or by previous employment experience performing the employee's particular work skill or function;

 

5)         The applicant commits that not less than the prevailing wage, as determined pursuant to the Prevailing Wage Act [820 ILCS 130], will be paid to the applicant's employees engaged in construction activities associated with the new energy storage facility and to the employees of the applicant's contractors engaged in construction activities associated with the new energy storage facility, and that, on or before the commercial operation date of the new energy storage facility, the applicant shall file a report with the Department certifying that the requirements of this subsection have been met; and

 

6)         The applicant commits that if selected to receive a grant, it will negotiate a project labor agreement for the construction of the new energy storage facility that includes provisions requiring the parties to the agreement to work together to establish diversity threshold requirements and to ensure best efforts to meet diversity targets, improve diversity at the applicable job site, create diverse apprenticeship opportunities, and create opportunities to employ former coal-fired power plant workers. [20 ILCS 3855/1-75(c-5)(10)(C)]

 

Section 710.50  Form of Grant Applications

 

a)         The Department will publish, for at least 30 calendar days, a Notice of Funding Opportunity on the GATA Grantee Portal (https://grants.illinois.gov/portal/). 

 

b)         The applicants will be required to submit an application package to the Department, which will include the following:

 

1)         Uniform grant application;

 

2)         Uniform budget template;

 

3)         Conflict of interest disclosure form;

 

4)         Mandatory disclosures form;

 

5)         Project narrative, which shall include the following information:

 

A)        A justification for developing an energy storage facility at the proposed site, including:

 

i)          How the applicant will engage with the local community during and after construction and how the energy storage project will help the local community;

 

ii)         A description of a plan or commitment to ecological site improvement (e.g., installation of native pollinator plantings equivalent to minimum standards defined in the Illinois Department of Natural Resources "Solar Site Pollinator Scorecard");

 

B)        A description of the applicant's ability to successfully complete the project for which funds are intended, including:

 

i)          A description of the applicant's experience in the development of energy storage facilities, how many energy storage facilities the applicant currently has in commercial operation and how many are currently under construction.  The applicant or major contractor partner should provide at least three client references for energy storage facilities that are complete and operating, sized 5 megawatt hours (MWh) or larger.

 

ii)         Anticipated timelines for construction and expected date for commercial operation launch.  The owner of the proposed energy storage facility must commit to placing the energy storage facility into commercial operation on either June 1, 2023, June 1, 2024 or June 1, 2025, with such date subject to adjustment as needed due to any delays in completing the grant contracting process, in finalizing interconnection agreements and in installing interconnection facilities, and in obtaining necessary governmental permits and approvals. [20 ILCS 3855/1075(c-5)(8)]

 

iii)        Expected capacity of the energy storage facility in megawatts at the site of the proposed energy storage facility.

 

iv)        A technology description that defines the energy storage type (e.g., battery, hydrogen fuel cell) and summarizing the key components and the design of the overall system.

 

v)         A summary of additional key technical characteristics, including:

 

•           Energy storage capacity or the maximum amount of stored energy, in megawatt hours (MWh).

 

•           Storage duration or the amount of time stored energy can discharge at the rated power capacity before depleting the system's energy capacity, in hours.

 

•           Expected system life, in years, based on anticipated operating conditions.

 

•           Estimated energy storage in the first 12 months of system operation, including, Alternating Current (AC) energy (in MWh) for system charging and AC energy (in MWh) discharging from the system to the grid.

 

•           Estimated annual system degradation rate, as a percentage, based on annual reduction in the system's energy capacity.

 

vi)        Documentation, including production technical specification sheets, that provides the basis for key technical characteristics described in this subsection.

 

C)        A description of the applicant's ability and strategy to meet the commitments and agreements listed as criteria for receipt of a grant in 20 ILCS 3855/1-75(c-5)(10)(C).  The applicant should:

 

i)          Explain the applicant's plan for ensuring the energy storage facility will be constructed or installed by a qualified entity or entities consistent with the requirements of the Public Utilities Act [220 ILCS 5/16-128A(g)] and any rules adopted under that Section;

 

ii)         Describe existing relationships with workforce training partners and plans to meet training and hiring objectives of the program, particularly how they relate to achieving the program's diversity goals and providing employment opportunities for former employees of the coal-fueled electric generating facility;

 

iii)        Describe previous efforts the applicant took to negotiate project labor agreements for the construction of projects overseen by the applicant, including efforts to meet diversity targets, improve diversity at job sites, create diverse apprenticeship opportunities, and create opportunities to employ former coal-fired power plant workers; and

 

iv)        Describe how it will meet the requirement of paying at least the prevailing wage, pursuant to the Prevailing Wage Act [820 ILCS 130], to the applicant's employees and contractor's employees engaged in construction of the energy storage facilities;

 

D)        Certification of eligibility, which shall be in the form of a signed letter by the applicant on company letterhead which certifies that the applicant and its proposed project meet the criteria listed in Section 710.40(b) and (c).  All certifications made by the applicant must also be certified by the electric generating unit owner if they are not the same entity. If a grant applicant is not the owner of the electric generating unit, the applicant shall submit to the Department proof of corporate structure showing the applicant's relationship to the owner of the facility; and

 

6)         Any additional documentation to demonstrate or support the information submitted by the applicant for the proposed project.

 

c)         Applicants may apply for a grant for more than one project but must submit a separate application for each proposed energy storage facility location.

 

Section 710.60  Grant Award Selection

 

Grants will be awarded by the Department to grantees following a merit review by DCEO and pursuant to GATA requirements (44 Ill. Adm. Code 7000.350).  The Department will award up to five total grants that support the installation and operation of energy storage facilities at the sites of up to three qualifying electric generating facilities located in the Midcontinent Independent System Operator, Inc. region in Illinois and the sites of up to two qualifying electric generating facilities located in the PJM Interconnection, LLC region in Illinois.  In evaluating applications, the Department will consider the criteria listed below:

 

a)         Whether the applicant and the proposed energy storage facility site meet the eligibility criteria (Section 710.40);

 

b)         The need to develop an energy storage facility at the proposed site.  This will be based on:

 

1)         A demonstration of how the applicant will engage effectively with the local community during and after construction;

 

2)         A justification for the specific project location of the energy storage project beyond meeting the qualifications established by the Act (e.g., located at a site with generating capacity of at least 150 megawatts; sites burned or is burning coal as its primary source of fuel);

 

3)         Providing documents from Midcontinent Independent System Operator, Inc. or PJM Interconnection, LLC, indicating proposed project may be interconnected to the regional transmission grid, as applicable; and

 

4)         A demonstration of a plan and commitment to ecological site improvement;

 

c)         A demonstration of the ability to successfully complete the energy storage facility project. This will be based on the following criteria:

 

1)         Successful prior experience in the development of energy storage facilities;

 

2)         Significant energy storage performance based on estimated annual MWh energy storage capacity and total estimated MWh energy storage capacity over the life of the energy storage system as follows:

 

A)        Energy storage capacity, or the maximum amount of stored energy, in MWh;

 

B)        Storage duration in hours;

 

C)        Expected system life in years based on anticipated operating conditions;

 

D)        Estimated energy storage in the first twelve months of system operation; and

 

E)        Estimated annual system degradation rate, as a percentage;

 

3)         The ability to provide realistic timelines for construction and the expected date for commercial operation launch, which comply with the requirements of 20 ILCS 3855/1-75(c-5)(10)(C)(8);

 

4)         Energy storage capacity of at least 37 megawatts at the proposed energy storage facility site; and

 

5)         The ability to meet the requirements of 20 ILCS 3855/1-75(c-5)(10)(C) and this Part, as demonstrated in the technology description.

 

d)         A demonstration of the ability to meet the commitments and agreements listed in 20 ILCS 3855/1-75(c-5)(10)(C) and in this Part (Section 710.40).  Evaluation will be based on the following criteria:

 

1)         The applicant's plan for ensuring the energy storage facility will be constructed or installed by a qualified entity or entities consistent with the requirements of subsection (g) of Section 16-128A of the Public Utilities Act [220 ILCS 5/16-128A(g)] and any rules adopted under that Section. Applicants should be able to demonstrate the effectiveness of the plan;

 

2)         Existing and proposed relationships with workforce training partners and plans to meet training and hiring objectives of the program, particularly how they relate to achieving the program's diversity goals and providing employment opportunities for employees of the coal-fueled electric generating facility.  The applicant should be able to identify current relationships with workforce training partners and provide a quality plan to ensure that personnel operating the energy storage facility will have the skills, knowledge, training and experience to complete the program, as well as efforts to ensure diverse hiring and opportunities for employees of coal plants; and

 

3)         Previous efforts the applicant has had in negotiating project labor agreements for the construction of projects overseen by the applicant and the details describing efforts to meet diversity targets, improve diversity at job sites, provide diverse apprenticeship opportunities, and provide opportunities to employ former coal-fired power plant workers.  The applicant should describe past experiences negotiating project labor agreements and the effectiveness of past experience in improving diversity and apprenticeship opportunities.

 

e)         Applicants may appeal any denial pursuant to the process described in 44 Ill. Adm. Code 7000.350(g).

 

Section 710.70  Grant Agreements and Grant Administration

 

a)         Grant Agreements and Payment Disbursements

 

1)         Applicants selected to receive a grant will enter into a grant agreement with the Department, which specifies the terms and conditions of the award.  Grant awards will be administered in a manner that complies with all applicable State and federal requirements including, but not limited to, GATA, the Uniform Guidance and the Act and this Part.  The Department reserves the right to suspend or terminate a grant agreement, recoup grant funds received under this Part or withhold any future year funding for non-compliance with the provisions in the grant agreement or non-compliance with applicable State and federal laws pursuant to the requirements of the Grantee Compliance Enforcement System, 44 Ill. Adm. Code 7000.80.

 

2)         Grant payments shall be made by the Department to a grantee only once the grantee provides an interconnection agreement with PJM  Interconnection, LLC or Midcontinent Independent  System Operator, Inc. and the grantee's energy storage facility has been placed into commercial operation. Therefore, grantees must be able to pay for energy storage facility construction costs.  The Department shall make the grant payments to the grantee in equal annual amounts for 10 years following the date the grantee's energy storage facility is placed into commercial operation. The annual grant payments to a qualifying energy storage facility shall be $110,000 per megawatt of energy storage capacity, with total annual grant payments not to exceed $28,050,000 in any year. [20 ILCS 3855/1-75(c)(10)(C)] Total program expenditures throughout the life of the program may not exceed $280,500,000.

 

A)        Grant award amounts will be based on the energy storage capacity provided by the grantee in its application. The Department reserves the right to reduce the grant award amount or modify the award amount if it determines after installation, based on information provided by the grantee, that the actual energy storage capacity is less than the grantee's proposed energy storage capacity.

 

B)        As part of the grant agreement requirements, grantees will be required to submit a commissioning plan that must be approved by the Department, which will set forth the requirements for when the energy storage facility is considered successfully placed into commercial operation and will include verification of the facility specifications and evidence that the facility is operational.

 

3)         Grant agreements shall specify the date or dates in each year on which the annual grant payments shall be paid. [20 ILCS 3855/1-75(c)(10)(D)]

 

b)         Grant Performance, Administration, Monitoring and Reporting Requirements

Grantees shall comply with all GATA and Department requirements set forth in the grant agreement for grant performance, administration, audits, monitoring and reporting. 

 

1)         Grant performance goals and performance and expenditure reporting will be based on the specific grant project activities of each grant award and will follow GATA requirements (44 Ill. Adm. Code 7000.410), which can include periodic financial and performance reports at least annually and financial and performance close-out reports after the end of the grant term (See 44 Ill. Adm. Code 7000.440). The deadlines for all required reports will be set forth in the grant agreement.  In addition to the performance and financial reports, grantees will be required to submit the following to the Department by the deadlines set in the grant agreement:

 

A)        Documentation demonstrating the new energy storage facility is being constructed or installed by a qualified entity or entities consistent with the requirements of subsection (g) of Section 16-128A of the Public Utilities Act [220 ILCS 5/16-128A(g)] and any rules adopted under that Section.

 

B)        Documentation demonstrating that personnel operating the energy storage facility will have the requisite skills, knowledge, training, experience and competence. [20 ILCS 3855/1-75(c-5)(10)(C)]

 

C)        A report certifying that the prevailing wage is being paid to employees engaged in construction activities associated with the new energy storage facility.  This includes the energy storage facility owner's employees and employees of the owner's contractors. This report must be submitted before the commercial operation date of the new energy storage facility and before any disbursement of funds.

 

D)        A report detailing a project labor agreement once one is executed with the entities constructing the new energy storage facility.  The report will provide evidence that diversity threshold requirements were achieved and detail pathways to meet diversity targets, improve diversity at the applicable job site, create diverse apprenticeship opportunities, and create opportunities to employ former coal-fired power plant workers.

 

E)        A copy of the grantee's diversity, equity and inclusion plan filed with the Illinois Commerce Commission (See subsection (c)) and any revisions thereto.  The grantee will be required to submit to the Department the annual report the grantee files with the Illinois Commerce Commission detailing the grantee's progress in implementing its plan and achieving its goals.

 

F)         Documentation or other evidence after installation of the energy storage facility that the energy storage facility is able to meet the provided storage capacity, which was the basis for the grant award amount.

 

G)        An annual report that provides the storage system performance data to the Department electronically.  The grantee will annually provide data on:

 

i)          Alternating Current energy consumption for storage system charging; and

 

ii)         Alternating Current energy discharge from the system to the grid.

 

H)        Electronic data submissions will provide energy consumption data and energy discharge data in time-and-date-stamped increments of fifteen minutes or less throughout the annual reporting period.

 

2)         Grant audits shall be based on the standards set forth in the GATA Rule (44 Ill. Adm. Code 7000.90).

 

3)         Grantees must monitor their grant activities and those of any subrecipients and contractors to assure compliance with applicable State and federal requirements and to assure their performance expectations are being achieved.  The Department will monitor the activities of grantees to assure compliance with all requirements and performance expectations of the award.  Grantees shall timely submit all required reports, and shall supply, upon the Department's request, documents and information relevant to the award.  The Department may monitor activities through site visits.  

 

4)         All grant recipients shall have an affirmative duty to notify the Department of any changes in corporate structure that affect one or several of these conditions:

 

A)        The ownership interest of the electric generating unit owner; 

 

B)        The relationship between the electric generating unit owner and the grant recipient, if the grant recipient is not the unit owner; or

 

C)        The ability of the grantee to complete its requirements in the grant agreement.

 

5)         Grant recipients will be prohibited from interconnecting the energy storage facility project supported by this Program with any new renewable energy facility or energy storage facility located at the same site or an adjacent site and which is selected by the Illinois Power Agency pursuant to Section 1-75(c-5) of the Illinois Power Agency Act [20 ILCS 3855] to enter into a contract to sell renewable energy credits to one or more electric utilities from the new renewable energy facility.

 

c)         Diversity, Equity and Inclusion Plans

 

1)         Each grantee selected by the Department to receive a grant or grants to support the construction and operation of a new energy storage facility or facilities in accordance with this Part shall, within 60 days following execution of a grant agreement with the Department, submit to the Illinois Commerce Commission, in a format determined by the Commission, a diversity, equity, and inclusion plan setting forth the grantee's numeric goals for the diversity composition of its supplier entities for the new energy storage facility, which shall be referred to for purposes of this subsection (c)(1) as the project, and the grantee's action plan and schedule for achieving those goals. [20 ILCS 3855/1-75(c-5)(9)(C)(11)(A)]

 

2)         For purposes of this subsection (c)(1), diversity composition shall be based on the percentage, which shall be a minimum of 25% of eligible expenditures for contract awards for materials and services (which shall be defined in the plan) to business enterprises owned by minority persons, women, or persons with disabilities as defined in Section 2 of the Business Enterprise for Minorities, Women, and Persons with Disabilities Act [30 ILCS 575/2], to LGBTQ business enterprises, to veteran-owned business enterprises, and to business enterprises located in environmental justice communities. The diversity composition goals of the plan may include eligible expenditures in areas for vendor or supplier opportunities in addition to development and construction of the project, and may exclude from eligible expenditures materials and services with limited market availability, limited production and availability from suppliers in the United States, such as solar panels and storage batteries, and material and services that are subject to critical energy infrastructure or cybersecurity requirements or restrictions. The plan may provide that the diversity composition goals may be met through tier 1 (prime contractor) or tier 2 (subcontractor) expenditures or a combination thereof for the project. [20 ILCS 3855/1-75(c-5)(C)(11)(B)]

 

3)         The plan shall provide for, but not be limited to:

 

A)        Internal initiatives, including multi-tier initiatives, by the grantee, or by its engineering, procurement and construction contractor if one is used for the project, which, for purposes of this subsection (c)(3)(A), shall be referred to as the EPC contractor, to enable diverse businesses to be considered fairly for selection to provide materials and services;

 

B)        Requirements for the grantee or its EPC contractor to proactively solicit and utilize diverse businesses to provide materials and services; and

 

C)        Requirements for the grantee or its EPC contractor to hire a diverse workforce for the project.

 

4)         The plan shall include a description of the grantee's diversity recruiting efforts both for the project and for other areas of the grantee's business operations. The plan shall provide for the imposition of financial penalties on the grantee's EPC contractor for failure to exercise best efforts to comply with and execute the EPC contractor's diversity obligations under the plan. The plan may provide for the grantee to set aside a portion of the work on the project to serve as an incubation program for qualified businesses, as specified in the plan, owned by minority persons, women, persons with disabilities, LGBTQ persons, and veterans, and businesses located in environmental justice communities, seeking to enter the renewable energy industry. [20 ILCS 3855/1-75(c-5)]

 

5)         The grantee may submit a revised or updated plan to the Commission from time to time as circumstances warrant. The grantee shall file annual reports with the Commission by June 1, commencing June 1, 2023 or the earliest based on receipt of a grant, detailing the grantee's progress in implementing its plan and achieving its goals and any modifications the grantee has made to its plan to better achieve its diversity, equity and inclusion goals. The grantee shall file a final report on the fifth June 1 following the commercial operation date of the new energy storage facility, but the grantee shall thereafter continue to be subject to applicable reporting requirements of Section 5-117 of the Public Utilities Act [220 ILCS 5/5-117].

 

d)         Records Retention

Grantees shall maintain, for the period of time set forth in the GATA rules (44 Ill. Adm. Code 7000.430(a) and (b)) adequate books, all financial records and supporting documents, statistical records, and all other records pertinent to the program. If any litigation, claim or audit is started before the expiration of the retention period, the records must be retained until all litigation, claims or audit exceptions involving the records have been resolved and final action taken. Grantees shall be responsible for ensuring that contractors and subrecipients comply with the retention requirements.