Last week the Illinois legislature passed the Future Energy Jobs Bill (SB 2814). This is no small feat. The bill is one of the most comprehensive state energy bills ever crafted and is the most important climate bill in Illinois history.
The Illinois General Assembly passed the bill with bipartisan support, and it was signed into law by Governor Rauner yesterday.
As I mentioned in my previous blog on the bill, the Union of Concerned Scientists is a member of the Illinois Clean Jobs Coalition, which has been working on this energy bill for nearly two years. We are thrilled to see this bill pass, and be signed into law. Here’s what you need to know about the Future Energy Jobs Bill:
Clean energy successes
A Fix to the Renewable Portfolio Standard
Community solar projects are becoming popular as a way to provide access to solar for everyone while being able to take advantage of the economies of scale for larger projects. (Source: Wikimedia)
The Future Energy Jobs Bill includes a meaningful fix to the state’s existing Renewable Portfolio Standard (RPS) law by fixing flaws in the policy, thus ensuring stable and predictable funding for renewable development.
More than $200 million per year of the money we spend on electricity will now be spent on building new solar and wind facilities in Illinois. The bill requires a minimum of 3,000 megawatts (MW) of new solar power and 1,300 megawatts (MW) of new wind power to be built in the state by 2030.
Solar development
The bill also creates the state’s first community solar program, which allows those not able to build solar on their roof the opportunity to subscribe to a shared project in their community. The bill also creates the Illinois Solar for All program, a comprehensive low-income solar deployment and job training program that will open up access to the solar economy for millions of low-income families.
Net metering is preserved in the final bill. Net metering allows customers with solar to feed electricity they do not use back to the grid to offset the cost of their electric bills. Net metering will continue in Illinois until deployment hits five percent of the load of the grid. After that, rooftop solar owners will get an up-front value of solar rebate to account for their geographic, time, and performance-based values to the grid.
Energy efficiency investments provide benefits to all ratepayers. (credit: Shutterstock.com/Kzenon)
Increased energy efficiency
The bill requires ComEd to achieve a 21.5% reduction and Ameren to achieve a 16% reduction in energy use by 2030, with a large focus on deep, long-lasting savings. The bill also requires $25 million per year to be spent on programs to help low-income homes become more efficient. Energy efficiency is one of the most cost-effective ways to combat climate change, create jobs, and lower electric bills for consumers.
It’s much more than a nuclear subsidy
As you can see, the bill includes a lot of great things for clean energy. A lot of the media, however, has focused on the nuclear subsidy portion of the bill. The bill creates a Zero Emission Standard (ZES) to subsidize two of Exelon’s nuclear plants (Clinton and Quad Cities) in Illinois. There is a cap on the total number of credits to provide, and a cap on the total program cost of $235 million per year.
This subsidy is based on the economic value of the avoided carbon emissions from these facilities using the federal social cost of carbon, which represents the avoided economic damages from climate change. This program will last for 10 years, and in return Exelon will keep the two plants open. The ZES ensures that any financial assistance to existing nuclear power plants will not dilute or otherwise come at the expense of the incentives for energy efficiency, grid modernization, or renewable resources.
Bad pieces blocked
The original version of the Future Energy Jobs Bill included a Fixed Resource Adequacy Plan (FRAP) that would have put the state in charge of procuring capacity in southern Illinois. The state would have to purchase power capacity downstate from power generators for four-year periods. This process would essentially prolong the life of old, uneconomic coal plants by providing hundreds of millions of dollars in market subsidies. Thankfully, this piece of the bill was taken out.
The original bill also included a change to the structure of residential electricity rates. The attempt to change the utility rate design is a trend occurring across the nation. The proposed change to the rate design would have greatly reduced the savings from investing in energy efficiency and distributed energy sources, such as rooftop solar. Thankfully, due to a lot of negative feedback on this provision from stakeholders and clean energy advocates, ComEd eliminated the demand-based rate provision.
A look ahead
By fixing Illinois’s broken renewable portfolio standard and by building on our record of success in energy efficiency, Illinois is now poised to become a leader in clean energy and to capture the jobs and investments that come with it.
This bipartisan victory for clean energy in the Midwest shines light on the theory that states can continue to lead on policies related to climate change and economic development, despite the uncertainty at the federal level.