Illinois Faces Electricity Price Spikes as Advocates Push for Energy Reform

With electricity prices expected to rise, environmental and industry groups are advocating for reform

March 5, 2025
Chandler Madden

Officials are hopeful that an energy package can be passed this spring.

Illinois is facing potential energy shortages and almost certain price spikes for northern Illinois this summer, according to consumer and environmental advocates. In Springfield, lawmakers and advocates have proposed bills aimed at addressing these concerns, though it remains uncertain whether they will pass before the General Assembly is scheduled to adjourn on May 31.

The growing electricity demand from data centers is putting pressure on the grid, while federally regulated grid operators are experiencing backlogs in approving renewable energy projects. This situation raises concerns about the availability of energy-generating resources, such as power plants and solar installations, in the coming years.

On Tuesday, environmentalists presented their proposals to strengthen the state’s grid and implement new consumer protections. This plan comes from the Illinois Clean Jobs Coalition (ICJC), a group of consumer and environmental advocates that has supported several significant energy bills, including the Climate and Equitable Jobs Act, which aims to eliminate all fossil fuel power plants by 2050.

The ICJC’s proposal, outlined in twin House and Senate bills, includes various measures designed to stabilize volatile electricity prices and enhance grid reliability. This proposal is more comprehensive than an earlier version introduced last spring.

Key provisions of the bill would raise energy efficiency targets for the state’s major utility companies, increase their minimum spending on low-income efficiency programs, and establish “time of use” electric rates. These rates would offer customers lower prices during times of low demand and higher prices during peak demand. Ameren Illinois, the utility serving downstate, would see its energy efficiency targets increase to align more closely with the already higher targets set for ComEd, as noted by Kari Ross, an energy affordability advocate with the Natural Resources Defense Council.

However, a utility official expressed concerns about the financial implications of this proposal. “It is vital that the financing costs of running energy efficiency programs are fully considered, ensuring that Ameren Illinois can fund reliability improvements at reasonable interest rates,” said Ameren spokesman Tucker Kennedy in a statement.

These elements were previously discussed but ultimately set aside during negotiations for an energy legislation package passed earlier this year, which was signed into law on February 19.

The new bill would also impose additional requirements on electric utilities and data center operators. Data centers, which house numerous computers that operate continuously, consume substantial amounts of electricity and have been identified as a contributing factor to rising electric demand.

Governor JB Pritzker has made the promotion of high-tech industries, including data centers, a cornerstone of his economic development agenda. Since he took office, numerous data centers have opened in Illinois.

Under the proposed legislation, utilities would be required to implement rules mandating that data center operators cover the costs associated with their increased energy demand. Additionally, the Illinois Environmental Protection Agency would be tasked with establishing environmental standards for this expanding industry.

“It’s no secret that these large energy-consuming facilities are moving into our communities. While they promise technological advancements and economic benefits, they also pose risks to the electric grid and impose a significant pollution burden on neighborhoods already impacted by toxic industries,” said Gina Ramirez, a representative of the Southeast Environmental Task Force.

The primary sponsor of the bill indicated that it is under consideration by a working group comprised of members from both the House and Senate, alongside advocates.

“We have learned a lot over the past few years as we worked on these comprehensive energy bills, similar to how we approached CEJA. We are becoming adept at this,” stated Rep. Anne Williams, D-Chicago. “We have a bicameral group with heavy involvement from the governor’s office in discussions. I believe we agree on the issues at hand and the focus areas moving forward.”

She and other advocates plan to address this issue in the spring.

Industry groups are also supporting battery storage initiatives. Recently, lawmakers introduced a proposal aimed at incentivizing the development of energy storage solutions. Proponents argue that this emerging technology can store energy generated by solar and wind sources during periods of low demand, making it available later when demand is high, even in the absence of sunlight or wind.

The proposal would empower the Illinois Power Agency, which oversees electricity procurement and planning, to start acquiring energy from storage facilities. The agency would also be required to develop a “storage procurement plan” similar to its renewable energy plan. Furthermore, it sets forth requirements for utilities to create a plan to utilize “virtual power plants,” which consist of resources like rooftop solar or home batteries contributing energy to the grid.

“Illinois energy demands will surpass our supply as early as 2030,” said bill sponsor Sen. Bill Cunningham, D-Chicago. “Battery storage is essential to mitigate this risk and its associated costs. Illinois residents are already feeling the effects of energy shortages.”

Cunningham noted that by mid-year, customers in northern Illinois could see their monthly bills increase by $10 to $30.

Rep. Marcus Evans, D-Chicago, is sponsoring a House version of the bill, with support from Rep. Barbera Hernandez, an Aurora Democrat who previously introduced a version of this proposal last year. The bill has garnered backing from at least six clean energy industry organizations, including the Solar Energy Industries Association and American Clean Power, two influential national lobbying groups.

“Energy demand in Illinois is rising rapidly, and solar and storage technologies are the quickest to develop and implement,” said Andrew Linhares, SEIA’s senior manager for the central region. “Investing in energy storage will not only enhance the power grid but also boost the state economy through job creation, private investment, and reduced consumer costs.”

Battery storage has been a contentious topic in Springfield recently. The ICJC proposal also includes an initial procurement round for energy storage at the Illinois Power Agency, along with requirements for a virtual power plant program.

Both the ICJC reform package and the industry-supported battery storage bill are pending hearings in the Senate Energy and Public Utilities Committee before they can be considered by the full Senate. The House versions of the bills have yet to be assigned to a committee.