Massive energy bill becomes law, investing billions between renewable, nuclear sectors

[September 16, 2021]  By JERRY NOWICKI
Capitol News Illinois
[e-mail]

SPRINGFIELD – Gov. JB Pritzker was joined by environmental and social justice activists, union representatives, and lawmakers from both parties Wednesday as he signed into law a sweeping energy regulation overhaul that aims to phase out carbon emissions from the energy sector by 2045 while diversifying the renewable energy workforce.

His signature marked a celebratory end to negotiations that began shortly after he took office in 2019, ended as he seeks a second term, and were feared permanently derailed on numerous occasions in between.

“We've seen the effects of climate change, right here in Illinois, repeatedly in the last two-and-a-half years alone,” Pritzker said at a bill-signing ceremony at Chicago’s Shedd Aquarium. “A polar vortex, devastating floods, microbursts that destroy buildings, record lake levels, extreme heat and emergency declarations in more than a third of Illinois counties.”

The governor mentioned Hurricane Ida’s destruction to the South and fires at the Boundary Waters wilderness area in Minnesota, describing the energy bill, Senate Bill 2408, as “the most significant step Illinois has taken in a generation toward a reliable, renewable, affordable and clean energy future.”

Specifically, the bill forces fossil fuel plants offline between 2030 and 2045, depending on the source and carbon emissions level, although the Illinois Commerce Commission, Illinois Power Agency and Illinois Environmental Protection Agency would have the authority to alter plant closure timelines in order to ensure energy grid reliability.
 

It subsidizes three nuclear plants with $694 million paid over a period of five years, and increases subsidies for renewable energy by more than $350 million annually. The latter is the driving piece in an effort to increase state’s renewables output from 7-8 percent of the energy mix currently to 40 percent by 2030 and 50 percent by 2040.

Another goal aims for 100 percent carbon-free energy by 2050, elevating the importance of the nuclear plants, which will continue to operate as a result of the massive subsidy.

Estimates for the cost of the bill have ranged from $3 to $4 monthly added to ratepayer bills according to the Citizens Utility Board, to $15 according to the senior advocacy group AARP. In terms of percentages, bill sponsor Sen. Michael Hastings, D-Frankfort, said residential electric bills would increase by about 3-4 percent, commercial bills by about 5-6 percent, and industrial bills by about 7-8 percent.

Large business and industry groups such as the Illinois Manufacturers’ Association and Illinois Chamber of Commerce opposed the bill due to its effects on businesses. But advocates argue the advent of more renewables will lower residential bills over time, creating savings for ratepayers as the cheaper renewables become more widely available.

While critics have also said the bill could cause grid reliability issues downstate, creating a need to import more expensive carbon-emitting power from neighboring states, supporters pointed to the five-year review by ICC, IPA and IEPA as a safeguard against such a reality.
 

Much of the hourlong news conference Wednesday was a celebration for the various interest groups and lawmakers that negotiated the bill.

Sen. Sue Rezin, R-Morris, represents multiple nuclear plants and was one of two Republicans to vote for the bill in the Senate.

With the bill, she said, “we ensure that our state's nuclear fleet will stay online and thousands of jobs and the tax revenue that they provide won't be lost. We ensure that our state won't lose the source of over 50 percent of its total energy and nearly 90 percent of the carbon-free energy. We ensure that our state has a better energy path.”

Exelon Corporation, which owns the state’s six nuclear plants, had threatened to close two of them in the coming days and months without the legislative action to make nuclear more competitive and cost-effective compared to fossil fuels and highly subsidized renewables. Five of the six Exelon plants will now receive subsidies.

Pat Devaney, secretary treasurer of the Illinois AFL-CIO federation of labor unions, said the bill “sets the strongest labor standards in the country” for renewable projects. It mandates project labor agreements for large-scale renewable projects and requires a prevailing wage be paid on non-residential renewable projects.

“This now-enacted piece of legislation proves that we do not have to choose between good jobs and a clean energy future for our state. We can do both,” he said.

Unions and environmentalists had struggled to come to an agreement on the bill, due in large part to the effect on coal plants which are heavily staffed and maintained by union labor. Two municipal coal plants – the City, Water, Light and Power plant in Springfield and Prairie State Energy Campus in the Metro East near St. Louis – were a particular sticking point.

Gov. JB Pritzker signs Senate Bill 2408, a sweeping energy regulation overhaul, into law at the Shedd Aquarium in Chicago Wednesday. (Credit: Blueroomstream.com)

Ultimately, those plants were neutral on the final bill language, which provides they must be carbon-free by 2045 and reduce emissions by 45 percent by 2035. If they cannot do so, they’d have three years to come into compliance or shut down part of their operations.

The signing also garnered attention from Washington, D.C., with U.S. Secretary of Energy Jennifer Granholm praising the measure in a news release.

“Preserving our existing fleet of nuclear reactors, adopting more clean and renewable energy, and incentivizing sales of electric vehicles are all key components of President Biden’s Build Back Better agenda and essential to reaching our nation’s climate goals,” she said in a statement. “Thanks to the leadership of Gov. Pritzker and legislators, Illinois will keep a number of nuclear power plants online – preserving thousands of good paying jobs – all while showing just what bold state-level action can do to usher in the clean energy future.”

The electric vehicle portion of the bill aims to put 1 million electric vehicles on Illinois roads by 2030, partially by offering incentives up to 80 percent of the cost of charging stations that were built by labor paid at the prevailing wage, based on a number of factors.

The bill also provides for a $4,000 rebate on an electric vehicle purchase starting in July 2022, which Pritzker said would be available to all Illinoisans, not just those in certain counties, as had been discussed during floor debate of the bill. That could be clarified in follow-up legislation which lawmakers have said will be considered in the fall veto session to clean up portions of the nearly 1,000-page bill.

The law also provides subsidies to convert coal-fired plants to solar or energy storage facilities at about $47 million annually starting in 2024. That provision, according Hastings, will be a boon to downstate by helping “transition shuttered coal plants into state-of-the-art solar energy sites with world-renowned battery storage,” a provision aimed at boosting the reliability of otherwise intermittent resources such as wind and solar.
 

Equity advocates said the law sets Illinois apart from other states by creating a $180 million annual investment in clean energy workforce diversification programs, as well as training programs aimed at providing the fossil fuel workforce with inroads into renewable energy.

Among many such provisions, the bill directs the Department of Commerce and Economic Opportunity to create the Clean Jobs Workforce Network program, which establishes 13 hubs in different communities across the state that rely on community-based organizations to provide job training and a career pipeline for equity-focused populations.

It also establishes training programs for those recently leaving incarceration, and creates a “Climate Bank” within the Illinois Finance Authority to help fund renewable projects and a “Jobs and Justice Fund” aimed at ensuring “the benefits of the clean energy economy are equitably distributed.”

Delmar Gillus, a social equity advocate with Elevate Illinois, praised the equity provisions as “nation-leading.”

At the bill signing Wednesday, he explained how it would help those who, according to the bill, hail from areas where “residents have historically been excluded from economic opportunities” or have “historically been subject to disproportionate burdens of pollution.”

“It means that Cheryl Johnson, from the People for Community Recovery, has access to seed capital money to build solar in her community,” Gillus said, naming several advocates who worked for the bill’s passage. “It means that Rev. Tony Pierce in Peoria has access to the prime contractor program that will provide underserved contractors the resources they need to become lead contractors that create jobs in their communities. It means that Troyce Polk from here in Chicago will have access to solar incentives so that he can develop projects that he has been planning for years.”
 

Rep. Ann Williams, a Chicago Democrat who sponsored the Clean Energy Jobs Act that provided much of the framework for the ultimate compromise, called Wednesday a “historic day” that marks “just the beginning” of a larger effort to combat climate change.

“The climate conversation is far from over in Illinois and everywhere else,” she said. “Addressing the climate crisis, which remains an escalating threat to the life and health of each and every one of us, will require ongoing, aggressive and sustained action at all levels of government.”

Capitol News Illinois is a nonprofit, nonpartisan news service covering state government and distributed to more than 400 newspapers statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.