With a very different federal landscape, and action on clean energy and climate change threatening to stall, the real climate action is going to occur where the rubber hits the road: cities and states. There is already tons of good news in this area, including, after more than two years of intensive negotiations: Illinois’ General Assembly just passed the most significant piece of climate and clean energy policy in the state’s history.
Last week during the final day of the annual veto session, the Illinois General Assembly passed sweeping clean energy and climate legislation that will pave the way toward a bright future that moves our electric sector toward a more modern, low carbon economy. And now, the Future Energy Jobs bill is on its way to the Governor’s desk where it’s expected to be signed. NRDC is incredibly proud to have worked closely with many, including Sierra Club, Environmental Defense Fund, the Citizens Utility Board, along with environmental justice leaders, faith groups, labor leaders, some of the state’s most influential business leaders and the nearly 200 plus members that belong to the Clean Jobs Coalition on this historic achievement.
The narrative on the bill has incorrectly focused on aid given to a pair of nuclear plants—more on that in a bit—but make no mistake, this bill is all about the future with major emphasis on energy conservation and clean renewable energy. Approximately 70% of the funds from the overall legislation will focus on kick starting clean energy, which dwarfs the dollars going to aid the two nuclear plants, and will help chart the path toward a clean, modern energy economy for decades to come—bringing tens of thousands of new jobs, billions in private investments, cleaner air and needed savings on monthly electricity bills, statewide.
The bill boils down to three major areas:
The crux of the bill is about getting smarter on how we generate, consume, and think about energy in Illinois—and one of the smartest things we can do is cut energy waste out of the system to avoid pollution and drive down cost. Energy efficiency is a resource that avoids the need to mine or burn dangerous fuels in the first place and has been one of the most potent policies the State of Illinois adopted to curb climate change—which just get a mega expansion.
When enacted, Illinois will have the distinction of one of the top energy efficiency programs in the entire nation, building on the success of laws put in place in 2007 that helped build a local clean energy workforce of more than 85,000 jobs state-wide, two billion in consumer savings, and the lowest electric rates in the entire Midwest. With this new paradigm for energy efficiency, we will further expand the number of jobs and savings by ushering in tens of thousands of new workers that will be focused on saving consumers and businesses money. Money saved on monthly utility bills is money that can now be spent elsewhere to further stimulate the state and local economies, which is yet another added benefit of energy efficiency.
All utility customers, both large and small for ComEd and Ameren, benefit from energy efficiency even if they do not install energy efficient LED light bulbs, add insulation to a building or get rid of their old inefficient appliances; although we hope they make such improvements. It’s the basic principles of economics; reducing overall energy consumption also reduces the overall price for electricity and utility infrastructure costs, which in turn lowers everyone’s monthly utility bills. The findings of independent experts commissioned by NRDC show for every $1 ComEd will spend on energy efficiency programs, monthly utility bills will be reduced by $3. That’s a fantastic investment from the consumer point of view and a principal reason why our friends at the Citizens Utility Board (CUB) along with NRDC and many others fought hard for the inclusion of robust energy efficiency standards. The bottom line is, when we all use less energy; we all pay less for it.
Commonwealth Edison (ComEd), one of the nation’s largest electric utilities, will be required to reduce demand by achieving an impressive 21.5% reduction in energy use by 2030. What is slightly less impressive is the meager improvement for the electric utility serving central and southern Illinois, Ameren, which committed to achieve a 16% reduction in energy use by 2030, though like ComEd, with a significantly larger exemption for our state’s largest energy consumers, which should be remedied to ensure residential customers and small businesses are not subsidizing the price of electricity for our state’s biggest energy hogs.
According to CUB, these new energy savings measures are expected to help deliver nearly $15 in net annual savings for every household in ComEd’s service territory (projected monthly savings are net of all costs from the entire Future Energy Jobs legislation).
Some additional details on changes to the energy efficiency programs:
- The new legislation incentivizes utilities to achieve more energy efficiency savings for its customers, with performance-based bonuses for exceeding annual energy saving targets, and financial penalties for falling short. That means the electric utilities are no longer rewarded for selling power, because that linkage has been broken and a utility can be rewarded for selling less power, subject to how much energy they reduce which is measured in steep annual goals. This new business model ensures an aggressive structure to incentive the kind of services consumers and business want: energy savings tools and lower energy prices.
- Thanks to the hard work of our partners at Elevate Energy, LVEJO and others, the bill requires a minimum $25 million per year to be spent exclusively on programs to increase the efficiency of low-income households for ComEd customers, which has a multitude of benefits including increased comfort during the upcoming winter—think of drafty inefficient windows.
- The bill also requires 10% of the overall budget be used to incentivize local governments to save energy and lower overhead costs.
- It expands on-bill financing options to allow homeowners to pay back costs of home upgrades on their electric bill giving greater optionality for anyone looking to make home efficiency improvements but can’t afford a big upfront investment.
- The new legislation also has caps that limit how much each utility can spend on energy efficiency, which could limit the utilities overall ability to achieve their annual goals, albeit with significantly larger annual investments under the new caps.
- The bill also allows our state’s largest energy consumers (10 megawatts or above) to opt-out of the programs entirely or self-direct their energy efficiency dollars, which could undercut the level of savings each utility is able to achieve and could lead to cross subsidies that hurt consumers and small businesses.
Anyone driving south on I-55 towards Springfield can see what an immense impact renewable energy can have on the state’s landscape. Driving at night, the red lights from wind turbines light the sky across the full horizon just past Dwight, Illinois. That amazing sight is a legacy of 2012, the year that Illinois installed the second most wind turbines in the nation.
We’ve barely installed any since.
That’s because the state’s Renewable Energy Portfolio Standard (RPS), a policy that drives renewable energy development, has been broken for many years. Despite a once nation-leading goal of securing 25% of our energy from renewables sources like wind and sun, there was no mechanism to provide steady funding to renewable developers, which is essential to build new projects in state and as a result, Illinois had fallen way behind the curve and is nowhere near our 25% by 2025 goals. The bill passed by General Assembly last week fixes the underlying problem, opening the door to a boom in wind and solar development that had been bypassing Illinois to neighboring states for years. The clean energy provisions in this bill will lead to billions in private investment and create thousands of new jobs—making the Future Energy Jobs Bill one of the greatest economic development plans Illinois has seen in a very long time. Some additional details:
- It is expected that the legislation will yield 3,000 megawatts of home grown solar development and 1,300 megawatts of new wind development right here in Illinois. Simply put, that’s enough solar and wind to power almost 1 million homes.
- Thanks to incredible advocacy and leadership by our environmental justice and faith partners at Little Village Environmental Justice Organization (LVEJO) and Faith in Place, The bill also creates the state’s first Community Solar program, which enables those not able to build solar on their roof to subscribe to a shared project in their community. That will give access to anyone (like myself) that lives in an apartment building, or can’t install solar on their roof, to subscribe to a solar project at a local church, school, or brownfield and have the energy rolled-off their own electric bill while enjoying the clean air benefits and reduced monthly bills.
- Retains a policy that provides payments to rooftop solar owners for the excess power they generate at a full retail rate known as “net metering”—and put an additional processes in place to ensure rooftop solar is incentivized through upfront rebates which lowers the cost for installers for years to come, while expanding the solar market to large box stores and commercial customers. The future for Illinois is indeed bright.
- Again, thanks to the many EJ and Faith allies, the legislation opens up opportunities to people in low-income communities who too often have been shut out of participating in the clean energy economy. The bill will invest more than $750 million in low-income programs, including a new Illinois Solar for All Program to prioritize new solar development and job training in economically disadvantaged communities. Specific programs will deliver consumer savings, economic development and job training and creation for ex-offenders, including a $10 million job development program for non-violent citizens returning from prison and former foster children who need a brighter path; which is an incredible achievement by our friends at Faith in Place that deserve a major kudos for connecting social justice and environmental values at the fore of advocacy. With more that needs to be achieved, this is a really great start!
Zero Emissions Standard
Here’s where some controversy comes in. Illinois has the largest nuclear fleet in the nation. For years Exelon—owner of the state’s nuclear fleet—has sought support for two of its plants, which have been losing incredible sums of cash and were in the process of being taken permanently off the grid. While NRDC is not a nuclear backer, and is unwilling to ignore the serious environmental and public safety concerns raised by the technology, we also remain concerned about the cost and climate implications of the two imminent closures without a plan in place to address the very real costs and associated emission impacts. The Future Energy Jobs bill will give life to huge increases in zero emitting renewable energy and energy conservation programs, which can take the place of any increase in carbon pollution from new polluting natural gas or coal facilities that are eager to the fill the vacuum. It will take time for the market and technology of wind and sun to scale, but a seamless carbon free transition can now be put in place. So, while we are not thrilled with every aspect of this bill, which is true of most compromises, the potential carbon bomb of the alternative was a much graver concern. And so the bill creates a new “Zero-Emission Standard” to prevent early closure of those nuclear plants which are expected to remain online for the next decade as the billions of dollars in clean resources scale. The ZES payments are also capped and were significantly reduced, which was yet another victory in the overall policy outcome that cannot be overlooked.
NRDC is under no illusion that the fight for a more just, inclusive and healthy clean energy economy is over and we will continue to try and improve on these historic outcomes to make further advances. But given the stakes and the new federal landscape for action on climate, NRDC is proud to be a part of the Clean Jobs Coalition that helped secure this monumental achievement for Illinois by supporting passage of the Future Energy Jobs Bill. We are equally appreciative to all of our partners and the thousands of citizen activists that helped bring this success to fruition by filing petitions, holding rallies, speaking at hearings and talking to legislators about a better tomorrow.
Most importantly, none of this would have been possible without the incredible leadership by the many committed members of the “Green Caucus,” an unofficial caucus of like-minded legislators, that prioritize the public interest and our future over polluters and their influential lobbies fighting against them along with the Governor and legislature that after two years of partisan gridlock made a historic agreement to advance clean energy from 9th biggest coal producing state in the nation. There will be more to say in the days and weeks ahead about what Illinois just accomplished, but make no mistake about it, the Future Energy Jobs Bill is a boon to everyone in need of clean air, to our climate, and the economy—and NRDC is thrilled to have supported its passage which will pay dividends well into the future.