2014 Lane Reports

Illinois' Green Energy Law Needs a Rewrite

The Lane Report, June 2014
Monday, June 2, 2014 10:00 am
by Marc J. Lane

Gov. Pat Quinn has proudly proclaimed that Illinois is the first in the nation in renewable energy use and, while the state has unquestionably earned its bragging rights, policymakers need to do more to ensure that our clean energy sector remains strong.

First, the good news: According to a report by the Environmental Law and Policy Center and other agencies, 91 Illinois communities have achieved 100 percent renewable electricity, a feat not accomplished by any other state.

Moreover, the Energy Information Administration ranks the state fifth in the nation in its generation of electricity from wind power. In fact, Illinois is among 12 states the Environmental Protection Agency credits with producing 80 percent of the country's wind power last year.

Illinois' support of clean energy leads to healthier communities, lower costs for consumers and the creation of new jobs. Nearly 100,000 workers are employed in the state's clean energy sector, according to a recent Clean Jobs Illinois report. One-third are highly paid employees in engineering, research, assembly and manufacturing; another third work in installation and maintenance, jobs that can't be outsourced or off-shored.

Even more good news is on the horizon. Home goods retailer Ikea's first wind investment in the United States will be its downstate wind farm — large enough, it claims, that its stores will never buy a single kilowatt of power again. And the $2 billion Rock Island Clean Line, slated for completion in 2017, is expected to take 3,500 megawatts of power created by wind turbines in Iowa and deliver them here.

REVAMPING POWER MANDATES

But Illinois' clean energy leadership would be stronger still if the General Assembly reformed the state's Renewable Portfolio Standard. Here's how RPS works now: Utility giants Ameren Corp. and Commonwealth Edison Co. are required to dedicate a small portion of their revenues to purchasing green energy, either directly in the form of energy from renewable sources or indirectly by purchasing tradable credits representing the environmental attributes of energy produced from renewable sources.

Under the Illinois Power Agency Act, the Illinois Power Agency decides where ComEd and Ameren get their power and how they meet their RPS mandates.

Alternative suppliers that now serve most Illinois customers are obliged to buy renewable energy credits, too, but they pay into an Alternative Compliance Payment fund. That fund can be accessed only when the power agency buys renewable energy or credits on behalf of ComEd and Ameren pursuant to the RPS.

But the agency hasn't needed to do so; the utilities' customer base has shrunk because municipal governments are forcing competition among electric supply services for their communities, meaning that they can satisfy their RPS requirements without the agency's involvement.

With no purchases being made on behalf of ComEd and Ameren, the upshot is that the Illinois Power Agency has no choice but to sit on ACP funds it otherwise would invest in the state's green economy.

An effort to revamp RPS and allow the Illinois Power Agency to purchase renewable energy on behalf of all Illinois customers died in the legislative session just ended. Let’s urge the General Assembly to rewrite the state’s 2007 clean-power law next year.


Marc J. Lane is a Chicago attorney and chairman of the Illinois Task Force on Social Innovation, Entrepreneurship, and Enterprise.

Reprinted from Marc Lane's May 6, 2014 editorial which appeared in Crain's Chicago Business. Crain Communication Inc.'s permission is gratefully acknowledged. Copyright © 2014 by Crain’s Communications Inc.


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