The IPA understands that the provision in Section 1-75(c)(1)(J) of the Act which states “renewable energy credits shall not be eligible to be counted toward the renewable energy requirements of this subsection (c) if they are sourced from a generating unit whose costs were being recovered through rates regulated by this State or any other state or states on or after January 1, 2017” was generally intended to ensure that facilities owned by a vertically integrated utility, for which REC revenues may be incidental to building and financing the facility, would not be eligible. The IPA states in its Long-Term Renewable Resources Procurement Plan that “the Agency believes that being a Qualifying Facility under the Public Utility Regulatory Policies Act (“PURPA”) (and also meeting the other aspects of the requirements of the Illinois RPS), would not be disqualifying because the Qualifying Facility does not directly recover its costs through rates; rather, it is compensated for its energy at the purchasing utility’s avoided cost rate.”

Please consult Section 4.2 of the IPA’s Long-Term Renewable Resources Plan for an interpretation of this section of the Act and for the manner in which the IPA intends to establish whether a facility’s cost is or is not recovered through rates regulated by a state.