W&S-27: If projects sell their energy (but not their RECs) to an affiliated utility with a rate base via a PPA, does this mean that the project has a return from a rate base and is ineligible to participate?

Section 1-75(c)(1)(J) of the Illinois Power Agency Act provides that renewable energy credits from generating units “whose costs are being recovered through rates regulated by this State or any other state or states on or after January 1, 2017” are ineligible for Illinois RPS compliance. Primarily, the IPA believes that this requirement was intended to ensure that RECs from rate-based projects approved by a state’s public utilities commission are not eligible to be used to satisfy the Illinois RPS, and thus is generally not intended to encompass off-take agreements, power purchase agreements, or the wholesale sales of energy, unless those transactions were expressly approved by the state’s public utilities commission or other relevant regulatory authority in a proceeding to set regulated utility rates.  However, a final interpretation of this language is not being offered through this RFP process; further detail around the determination of whether a generating unit’s “costs are being recovered through” regulated “rates” will be included in the IPA’s long-term renewable resources plan, and any final determinations about the scope of projects included in that prohibition will be subject to final determination by the Illinois Commerce Commission in its Order approving the IPA’s proposed plan.