The Future of Buildings in Illinois Is Electric

The study offers some useful insights, but treating all of its findings as a road map for Illinois’s gas transition would be a mistake. Before getting into the no-regrets steps that Illinois can take now, we need to unpack the biggest problems with the report, including the flawed assumptions behind some of its conclusions. 

Despite the study’s shortcomings detailed above, several key findings should influence the recommendations in the final FOG report:  

1. Rapid heat pump deployment is essential across all scenarios: Every feasible scenario in the pathways study requires significant heat pump deployment. Today, 3 percent of homes in Illinois have a heat pump. To meet decarbonization targets, the study finds that 52–97 percent of homes will need an electric heat pump by 2050. In the High Electrification, High Geothermal, and Hybrid Electrification scenarios, the ones we deem most feasible, heat pump sales increase from 40,000 per year in 2025 to roughly 300,000–400,000 per year in 2050.  

2. Gas rates are rising, but a managed transition can help: Across every scenario modeled, gas use in Illinois declines by approximately 50–85 percent by 2050. This increases customers’ gas bills, as the fixed costs of the gas pipeline network are spread among a smaller remaining customer base in most scenarios and as the cost of the gas commodity itself increases in the Continued Gas Use scenario due to alternative fuel costs. As a result, the study finds that gas rates will increase between fourfold and 25-fold by 2050.  

   Importantly, a “managed” transition from the gas system—which avoids ongoing pipeline replacements by electrifying the households served by old pipelines—can help, as discussed further below. 

3. All-electric customers have the lowest energy bills: In every single scenario, all-electric customers have significantly lower average monthly utility bills than gas customers by 2050. This emphasizes the need to help low-income households transition away from the gas system early on, so they are not left behind on a high-cost system. It also underscores the importance of a managed gas transition, which reduces gas system pipeline spending alongside reductions in gas demand.  

4. Scenarios that rely on speculative “alternative” fuels are not feasible: The study presents results from Continued Gas Use and Hybrid Gas cases that rely heavily on technologies that are “not widely used currently or not fully commercialized” today in order to “decarbonize” remaining gas use.  These technologies include biomethane, green hydrogen, direct air carbon capture, and electrolytic methane (“e-methane,” which the study assumes is derived by combining green hydrogen and carbon captured directly from the air).  

   Biomethane is limited in quantity, has dubious emissions benefits that vary by feedstock, and faces steep competition from other industries. It is especially problematic that the study assumes more than half of the biomethane deployed in the Continued Gas Use scenario would be derived from dedicated energy crops plus carbon capture and storage (CCS), but it does not address the land, water, and energy use impacts of this production pathway.   

The remaining technologies are incredibly early-stage, and to the extent that they are available at all over the next several decades, they are likely to be extremely expensive. The study’s assumptions around e-methane are particularly troubling. Modeling initially showed that the Continued Gas Use and Hybrid Gas cases could not meet the net-zero-by-2050 emissions requirement using only available technologies, like biomethane. As a result, in the final report, the model selected e-methane to backfill any resource gap—despite the fact that e-methane derived from green hydrogen and direct air carbon capture is still in “prototype and demonstration stage” today.  

While the pathways study acknowledges that “[h]igher-gas scenarios present…greater challenges in alternative fuel procurement, technology readiness, long-term affordability, and air quality” compared to electrification-focused scenarios, this is a significant understatement. Scenarios relying on e-methane are infeasible and should not be considered on equal footing with scenarios that primarily rely on electric heat pumps, which already comprise 47 percent of air conditioner sales and have annually outsold gas furnaces since 2021.  

The pathways study reinforces the need for Illinois to proactively plan for a future where gas demand declines, which occurs under all five scenarios despite flawed assumptions that heavily favor continued gas use scenarios. The state can and must act now to achieve the state’s climate goals in an affordable and equitable way. Illinois does not need to solve every aspect of the transition in the next few years. However, it can begin taking the following no-regrets steps now to prepare for a changing energy landscape. 

1. Plan for a smaller gas system: A managed gas system transition may have the potential to save Illinois gas ratepayers hundreds of millions in avoided gas investment. Yet the pathways study presents these findings as “illustrative” and notes that the underlying “assumption was not drawn from external sources or from an Illinois-specific engineering assessment.”  

   Understanding the different cost implications between a managed and unmanaged transition is critical as the state undergoes gas transition planning. As a next step, Illinois should require gas utilities to engage in long-term comprehensive gas system planning. Proactive gas planning gives more insight to regulators and the public to help effectively manage the decline in gas throughput. 

2. Remove ratepayer-backed subsidies for new gas system connections: While decarbonization of the gas system is possible, the study highlights the many obstacles in equitably transitioning off the gas system. To alleviate some of these challenges, the state should stop expanding the gas system as a no-regrets solution that minimizes the stranded asset risk that is magnified in scenarios that rely on gas infrastructure. A first step in slowing down the expansion is removing ratepayer-funded gas subsidies known as gas line extension allowances.  
3. Accelerate heat pump adoption, with a focus on low-income households: Study findings illustrate the need to accelerate heat pump adoption now as a no-regrets strategy. The state could explore updating building codes to require these technologies in new construction, increasing utility incentives for these technologies, and exploring rate design options to incentivize heat pump use. Further, the state can enact the policies outlined in its Comprehensive Climate Action Plan, such as enacting a clean heat standard that would accelerate the adoption of heat pumps.  

Despite its numerous flaws, the study underscores the transformative role that clean, electric heat pumps will play in Illinois’s energy future and the need to plan for a smaller gas system. The ICC and the state legislature can and must begin advancing no-regrets building electrification policies today to ensure tomorrow’s energy system is healthy, clean, and affordable for all of the state’s residents.