The Illinois Energy Transition Act of 2021
  • November 15, 2021
The Illinois Energy Transition Act of 2021

By Michael DeCaluwe, CEM | November 15, 2021

You may have heard about the new clean energy legislation that was passed in Illinois in September of this year.

For Illinois businesses that know the details of the Act and are poised to take advantage of them, the bill represents an opportunity to reduce costs. Meanwhile, those that aren’t taking advantage of these opportunities will be facing a significant energy cost increase in the coming years.

Here’s what you need to know about the new law and how it could impact Illinois businesses.

What is the Illinois Energy Transition Act?

The Illinois Energy Transition Act of 2021 is a follow up to the Illinois Future Energy Jobs Act of 2016. The 2021 Act will roll out new renewable energy mandates and programs starting in 2022 with the goal of moving Illinois to 100 percent carbon-free electricity by 2050.

Even before the US pulled out of the Paris Climate Accord in 2017, states and cities had begun to implement their own green energy programs and mandates. This latest legislation is a continuation of those efforts in Illinois.

What’s in the bill?

The bill addresses many aspects of the state’s energy infrastructure, including:

  • subsidies for nuclear power plants,
  • money for electric vehicle (EV) chargers,
  • increases in funds for energy efficiency projects,
  • jobs training programs,
  • money for converting natural gas-heated facilities to electric heat, and
  • an increase in the Renewable Portfolio Standard (RPS) that dictates how much of the power in Illinois must come from renewable sources.

The legislation also extends the current solar power program in Illinois. That means additional dollars for solar projects in the state.

What will this new legislation cost you?

As you can guess, this increased investment comes at a cost.

This cost will be passed through to customers on their ComEd or Ameren utility bills. The average commercial account using 2.5 million kilowatt-hours per year can expect a cost increase of $12,500 in 2022 and an estimated $40,000 in 2031.

Another possible cost increase that is hard to quantify involves the basic nature of renewable energy resources. With solar and wind as the two dominant sources of green energy, renewable energy tends to be an unreliable source of power (ie, no sunlight = no solar power!). As the Illinois grid increases its reliance on green energy, there is the possibility of more volatile pricing for power in the state due to the variability of green power.

Again, it’s difficult to quantify this volatility, but energy users in Illinois should be aware.

What can you do?

Those companies that are able to take advantage of some of the monies included in the bill can actually use the legislation to reduce their energy bills.

Some ideas for your organization include:

  • exploring energy efficiency projects and seeing how you can use new utility rebates to help pay for the projects;
  • using some of the new available money to install EV charging stations at your facility
    • which can help employee retention and be an income source;
  • new opportunities for virtual power purchase agreements (VPPAs) for customers over 10MW in demand
    • the economics on these agreements are even more favorable in Illinois;
  • research putting solar panels on your roof or adjacent land
    • the new law makes solar power extremely attractive;
  • making sure your energy supply agreements protect you against possible future market volatility.

While this new legislation will undoubtedly increase energy costs for some, those that know how to navigate the opportunities created by the Act can use it to lower their costs in the future.

If you’d like to learn more about the opportunities available to you, feel free to contact one of our energy advisors.