Illinois Groups Push for Energy Reform Amid Looming Electricity Price Increases

With electricity prices expected to rise, environmental and industry groups are advocating for reform. Officials are hopeful that an energy package will be passed this spring.

Illinois is facing potential energy shortfalls and certain price spikes for northern Illinois this summer, according to consumer and environmental advocates. In response, lawmakers and advocates in Springfield have proposed bills designed to address these concerns, although it’s uncertain if they will pass before the General Assembly’s anticipated adjournment on May 31.

The increasing demand for electricity from data centers is straining the grid, while federally regulated grid operators are experiencing delays in approving renewable energy projects. This situation raises concerns about whether there will be enough energy-generating resources, such as power plants and solar installations, in the years to come.

On Tuesday, environmentalists presented their proposals to strengthen the state’s grid and introduce new consumer protections. This plan, developed by the Illinois Clean Jobs Coalition (ICJC), consists of several provisions aimed at stabilizing fluctuating electricity prices and enhancing grid reliability. The proposal is more comprehensive than its earlier version introduced last spring.

Key components of the bill include raising energy efficiency targets for the state’s major utility companies, increasing their minimum spending on low-income efficiency programs, and establishing “time of use” electric rates. These rates would offer customers lower prices during periods of low demand and higher rates during peak demand times. According to Kari Ross, an advocate for energy affordability at the Natural Resource Defense Council, Ameren Illinois, the utility serving downstate, would see its energy efficiency targets increased to match the already higher standards set for ComEd.

However, a utility official raised concerns about the financial implications of these proposals. “It is essential that the financing costs associated with energy efficiency programs are fully considered, and that Ameren Illinois’ ability to fund reliability improvements at reasonable interest rates is not jeopardized,” stated Ameren spokesman Tucker Kennedy.

These elements were discussed in earlier negotiations surrounding a package of energy legislation passed earlier this year, which was signed into law on February 19. This law also imposes new requirements on electric utilities and data center operators. Data centers, which are large facilities housing numerous computers that run continuously, consume significant amounts of electricity and have been identified as a factor contributing to rising electric demand.

Governor JB Pritzker has prioritized the promotion of high-tech industries, including data centers, as a key element of his economic development strategy. Since he took office, many data centers have opened in Illinois. Under the new proposal, utilities would be required to implement rules that hold data center operators accountable for 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 energy-intensive facilities are moving into our neighborhoods. While they promise progress, economic benefits, and technological advancements, they also pose risks to the electric grid and impose a significant pollution burden on communities that are already surrounded by toxic industries,” said Gina Ramirez, a representative of the Southeast Environmental Task Force.

The lead sponsor of the bill noted that it is under consideration by a working group consisting of members from both the House and Senate, along with advocates.

“We have gained valuable insights over the past few years while working on these comprehensive energy bills, similar to our approach with CEJA. We are making progress,” said Rep. Anne Williams, D-Chicago. “We have a bicameral group involved, and the governor’s office is heavily engaged in the discussions. We have reached a point where we agree on the problems and the key issues we need to address moving forward.” She and other advocates are determined to tackle this issue this spring.

In a separate initiative, lawmakers recently introduced a proposal aimed at incentivizing the development of energy storage technologies. Proponents assert that this emerging technology can store energy generated from solar and wind sources during periods of low demand, making it available for use during times of high demand, even when the sun isn’t shining or the wind isn’t blowing.

This proposal would empower the Illinois Power Agency, which oversees electricity procurement and planning, to initiate procurement from energy storage facilities. Additionally, the agency would be required to create a “storage procurement plan,” akin to its renewable energy plan. It also outlines requirements for utilities to devise a plan for “virtual power plants,” which consist of resources like rooftop solar panels or residential batteries that can feed energy back into the grid.

“Illinois’ energy demands will exceed our supply as early as 2030,” stated bill sponsor Sen. Bill Cunningham, D-Chicago. “Battery storage is essential to mitigate this risk and reduce costs. Illinois residents are already feeling the effects of energy shortfalls.” Cunningham highlighted that, “by mid-year,” customers in northern Illinois could see an increase of $10 to $30 in their monthly bills.

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

“Energy demand in Illinois is rapidly increasing, and solar and storage technologies are the fastest to develop and deploy,” remarked Andrew Linhares, SEIA’s senior manager for the central region. “Investing in energy storage will not only bolster the power grid but also enhance the state’s economy through job creation, private investment, and reduced costs for consumers.”

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