After two years of tense negotiations, stakeholders agree that a sweeping new clean energy bill is likely to pass this month.
An ambitious clean energy bill appears poised to pass in Illinois before the end of the legislative session this month, with stakeholders feverishly negotiating to find common ground and hash out crucial details.
At least five different significant energy bills have been introduced, with the most recent addition — the Consumers and Climate First Act backed by Gov. J.B. Pritzker — potentially being the catalyst needed to get to the finish line.
The negotiations are playing out against a complicated backdrop: the corruption scandal engulfing utility ComEd that led to the replacement of longtime powerful state House Speaker Michael Madigan; the hemorrhaging of the state’s nascent solar industry since incentives ran out last year; and the promise of clean energy-related infrastructure spending from the federal government.
“It’s going to be a busy couple weeks,” said Robert Scott, executive director of clean energy alliance Power Up Illinois. “This is going to be such an interesting challenge for a new [House] speaker and a new approach for the state. There are a lot of moving pieces to it; we’ll see how it unfolds.”
Pritzker’s bill calls for phasing out coal-fired power by 2030 and natural gas-fired power by 2045. These targets are less ambitious than the Clean Energy Jobs Act, which calls for decarbonizing the power sector by 2030, and more ambitious than the proposed Path to 100, which calls for 40% renewables by 2030 and does not include a concrete date for transitioning to 100% renewable energy.
Pritzker’s bill includes plant-specific declining caps on emissions that would lead to closures; it would also put a price on carbon emissions of $8 a ton, escalating 3% each year.
“We agree on the mechanism,” to close plants, said J.C. Kibbey, clean energy advocate for the Natural Resources Defense Council, a member of the Clean Jobs Coalition backing the Clean Energy Jobs Act, regarding the governor’s bill. “There are some areas where the levels of ambition are a little different or where there’s alignment still to be built.”
Some have criticized the 2045 phase-out date for natural gas generation as too late, especially in light of a recent study from the Harvard T.H. Chan School of Public Health detailing the health burden of particulate matter from natural gas. The study found that, when considering both generation and building heat, natural poses a bigger risk than particulate from coal in Illinois.
“The transition away from coal is well underway; the conversation is how do we help those impacted,” said Jack Darin, director of the Illinois chapter of the Sierra Club. “The transition from gas is less certain. Gas is the biggest threat to Illinois getting to its clean energy goals.”
Solar and savings
Solar companies are pleased to see legislation moving forward and agree with the approach outlined in the governor’s bill, according to Nakhia Crossley, central region director and counsel at the Solar Energy Industries Association and a leader of the coalition of renewable energy companies backing Path to 100.
They have urgently pushed their bill, which is much more narrowly focused than the Clean Energy Jobs Act, saying that Illinois’ solar industry will suffer an irreparable decline if state solar incentives that ran out in the past year are not renewed by legislation.
“There’s an opportunity at this moment to restore faith in the General Assembly and the governor’s office that they have the intent to invest in the industry,” Crossley said. “There have been a lot of layoffs, a bunch of projects have halted construction and there are companies that had plans to invest in the state who have begun to make plans to move on to other states as a result of the [incentive] program’s depleted funding. The time really is now to prove the intent to increase renewables in order to avoid losing more jobs. It’s always tougher to restart after an industry has stopped.”
A recent study by prominent energy consultant Mark Pruitt found that Path to 100’s implementation would save Illinois customers $1.21 billion from 2021 to 2031, thanks to renewables. Pruitt found that installing enough wind and solar to meet Path to 100 goals would mean a decrease in wholesale energy costs of $1.76 billion and a decrease in wholesale capacity costs of $1.79 billion, plus consumer savings of $603 million from distributed rooftop solar and community solar. Customers would pay $2.96 billion more in charges for renewable energy on bills, but that would be more than offset by the savings, he found.
Distributed renewables and more energy efficiency mean less capacity would need to be purchased, Pruitt predicted, and renewables bidding into capacity markets at near-zero cost would also lower capacity prices. Regional transmission organizations like PJM and MISO in Illinois mandate how much capacity must be on hand, and if demand is lower thanks to renewables, those requirements could decrease.
Meanwhile, energy bought on the hourly markets would be cheaper with more utility-scale wind and solar available in those auctions, Pruitt found. And customers would use less energy from the grid if they have behind-the-meter rooftop solar or are subscribers to community solar projects.
While Pruitt’s study argues in favor of Path to 100, similar benefits would seemingly accrue through any legislation that sparks similar amounts of renewable development.
Just transition and equity
Pritzker’s bill includes many of the workforce training and equity components found in the Clean Energy Jobs Act, including the development of clean jobs training hubs, and scholarships and other supports for the families of workers displaced by the transition away from coal. Kibbey, of the Natural Resources Defense Council, said Clean Energy Jobs Act proponents are pleased that such measures were included but want to make sure that the programs can be adequately funded.
Pritzker’s bill expands the Illinois Solar for All program meant to make solar energy and solar jobs accessible to marginalized communities and those most affected by fossil fuels. It also demands that companies closing coal mines or coal plants provide detailed information on their workforce to help the state ease their transition, and provide two years’ notice of mass layoff or relocation plans.
Stakeholders backing different bills have all talked much about equity and just transition during the negotiations, though the Clean Energy Jobs Act contains the most specific and ambitious plans on both fronts. Unlike the Clean Energy Jobs Act, Pritzker’s bill does not prioritize the closure of plants in environmental justice communities.
“We’ve spoken with the governor’s office, they’ve expressed that’s where they’d like to go,” Kibbey said. The Clean Energy Jobs Act provisions “are more ambitious,” he said, “but we just want to work out a bill that’s as strong as it can be. Shared values are at least a good starting point.”
Deputy Gov. Christian Mitchell has said that revenues from the carbon tax are expected to raise up to half a billion dollars annually, and up to 40% of that would be spent on equity measures. The governor’s office did not respond to a request for comment for this article.
Pritzker’s bill, Path to 100 and the Clean Energy Jobs Act all propose lifting the cap on how much can be charged on customers’ monthly bills to fund renewable energy development.
The Clean Energy Jobs Act also calls for capacity market reforms — including allowing the state to essentially run its own capacity procurement — that it says would result in major savings that could be invested in renewables. Critics are skeptical that those savings would materialize, and note that the proposed reforms would greatly benefit the nuclear plants owned by Exelon, the parent company of the scandal-plagued ComEd.
The governor’s bill does not include those capacity market reforms. But it does call for smaller annual direct supports to keep open the Dresden and Byron nuclear plants. The bill relies on predictions from a recent report by the consulting firm Synapse, which found that the plants would need $19 million and $52 million respectively each year through 2025 to avoid closure. The amount for Dresden would be lower if a carbon price is adopted, improving the plant’s competitiveness with fossil fuels, Synapse found.
Kibbey said that “regardless of the nuclear plants, there are reasons we would want to reform capacity markets,” including to help renewables better participate in them.
Dave Kraft, director of the Nuclear Energy Information Service, which opposes nuclear energy, testified in a recent state House subcommittee hearing against any supports for the nuclear plants.
“Money spent on subsidizing nuclear power is money not available for renewable energy implementation,” Kraft said in submitted testimony. “If the state’s goal is to reach 100% renewable energy by 2050, then the resources to do so should be allocated directly to renewable energy, energy efficiency, energy storage, and improved transmission — all of which are carbon free, with the additional public benefit of generating no radioactive wastes.”
“You cannot build an energy future by bailing out the past,” Kraft’s testimony continued. “It would make far more economic sense in the long-term to get there directly and more aggressively supporting renewable energy, efficiency, energy storage and improved transmission.”
The coalition of labor unions backing the Climate Jobs Act also calls for significant subsidies for the state’s nuclear plants, emphasizing the tax base and union jobs they provide. The coalition has criticized Pritzker’s proposed subsidies as too small.
Pritzker’s bill includes some provisions sought by unions, including mandates for a prevailing wage paid on large community solar and large distributed generation projects, and project labor agreements on utility-scale wind and solar. Pritzker’s bill also calls for the creation of a climate bank that could issue bonds and make loans to accelerate clean energy. The labor union coalition has made a similar proposal.
The governor’s bill includes extensive utility accountability and transparency measures, including ending controversial formula rates that experts say have allowed ComEd to overcharge customers without showing how the funds were used.
All the major proposed bills include demands for utility reform, though the Climate Jobs Act has been described as guaranteeing ComEd increased profits. Before the scandal engulfing ComEd and Exelon broke, Exelon was part of the coalition backing the Clean Energy Jobs Act. But since then coalition members vowed not to collaborate with utilities.
On May 13 as negotiations were ongoing, church and community leaders who back the Clean Energy Jobs Act protested outside utility Ameren’s headquarters in St. Louis denouncing a $64 million proposed rate hike that the utility is seeking through formula rates.
“Ameren’s not fooling anyone,” Gregory Norris, founder of the group ACES 4 Youth, said in a statement. “The company attacking strong clean energy legislation is just a smokescreen to conceal their real concern that the Illinois Clean Jobs Coalition is trying to pass the strongest-ever utility accountability measures that would force them to disclose any inappropriate activity.”
Ameren Illinois has proposed its own bill in the legislature, including a controversial proposal to develop its own utility-scale renewables, and renewable targets less ambitious than the other bills. Ameren declined to answer questions for this story but provided a statement:
“We’re committed to helping move Illinois’ clean energy goals forward fairly and responsibly while protecting reliable and affordable energy for the people of Central and Southern Illinois. Stakeholder discussions are on-going and we will continue to advocate for energy policy that benefits Downstate just as much as other parts of the state. We are proud to say that Ameren Illinois customers are paying less today than they were in May of 2012 and Ameren Illinois rates are 21% lower than the national average.”
The jockeying by different stakeholders and complicated alliances and rivalries mirror the messy and intensive negotiation that went into passing the Future Energy Jobs Act in 2016 — the landmark energy legislation that overhauled the state’s renewable funding mechanism and sparked a solar boom, albeit short-lived. Nuclear plants received subsidies and ComEd won key benefits in that legislation, while efforts by coal companies to prop up their plants were shot down, and groundbreaking equity and solar development promises were enshrined in law.
Despite the protracted and often bitter nature of the current legislative debate, many players are hopeful that once again Illinois will pass a bill making it a national leader in clean energy and equity goals.
“We’re more optimistic than we’ve been to date,” over more than two years of negotiations, the Sierra Club’s Darin said. “Although there’s clearly interest in protecting consumers, there is an appetite for making investments that pay off in the long term.”