Lawmakers give small boost to renewable developments, delay broader reform

[January 10, 2025]  By Andrew Adams

SPRINGFIELD — Lawmakers this week passed a bill aimed at boosting the development of renewable energy generation, but its proponents said the final measure was a “skinny” version of what they had hoped to pass.

The bill comes as several state officials warn that Illinois is falling behind on its clean energy goals. The state’s main funding mechanism for renewable energy projects also faces a potential $3 billion budget shortfall in the coming years.

The legislation gives state regulators more authority to balance the budget for a key renewable energy financing tool, partially by shifting financial risk to electric utility customers. It also sets up a study of energy storage technology that is intended to form the basis of a new bill later this year.

“We’ve seen the effects of climate change. We’ve seen the effects on storms, extreme storms, extreme heat, extreme cold,” Rep. Robyn Gabel, D-Evanston, said during floor debate. “This is something we must do. We must move from fossil fuel, which emits carbon into the atmosphere, to renewable energy. This bill has a few small changes that will help us get renewable energy on the grid.”

The measure passed in the Senate 39-16 on Monday, with the House passing it the next day 74-39. It will next head to the governor’s desk for final approval before becoming law.

‘A very skinny bill’

The bill makes several changes to how the state funds renewable energy developments. Sen. Bill Cunningham, D-Chicago, described these as “highly technical.”

Existing law requires the state to purchase a certain amount of electricity from renewable sources. The Illinois Power Agency purchases this electricity using a system of financial instruments such as “renewable energy credits.” These are tracked and budgeted using the state’s renewable portfolio standard, or RPS.

But the IPA has struggled to find developers for some of these projects – particularly wind farms. One of the driving concerns that developers cite is whether the budget for the RPS, which is funded by a monthly charge to utility customers, is sufficient to fund renewable energy contracts approved by the agency.

This makes financing these large infrastructure projects difficult, as banks and other institutions worry about the risk of not being paid back if energy prices spike and the RPS budget falls short.

Over the past few years, the IPA has begun to raise alarms about the funding mechanism. In October, the agency said the RPS could face a $3.1 billion budget shortfall by 2039, based on the agency’s long-term renewable procurement plan.

The bill would guarantee that projects approved under the RPS will be funded in case of unexpected spikes in prices by allowing utility companies to charge consumers for the costs of any budget shortfall.

Gabel said during debate Tuesday that she doesn’t expect the policy to lead to rate increases and that even if utilities needed to recover money from customers, it would only be a temporary increase.

But Republicans were skeptical of transferring risk to ratepayers.

“All we’re doing here to add security to these failing projects is to transfer, to put the burden on taxpayers, on ratepayers, one way or another to make sure the creditors are going to get paid,” Rep. Brad Halbrook, R-Shelbyville, said during debate Tuesday.

The bill also grants the agency more flexibility on the split between its wind and solar procurement. While the agency has failed to meet wind targets in the past, it often meets or exceeds its solar targets thanks in part to the booming solar industry in the state.

These provisions were negotiated and largely agreed upon by the agency and representatives of the renewable industry.

“We think this bill makes important and necessary changes, and we’re looking forward to more robust discussions this spring,” IPA Director Brian Granahan said in a statement Tuesday.

Sen. Bill Cunningham, D-Chicago, speaks at a Capitol rally organized by environmental groups on Tuesday. (Capitol News Illinois photo by Andrew Adams)

Revisiting the issue

The bill also requires the Illinois Commerce Commission to host a series of workshops exploring battery-based energy storage. Renewable energy advocates increasingly are looking to the nascent technology as a way to make wind and solar power more reliable.

Because wind and solar power often do not generate electricity at times of peak demand, storing electricity generated at off-peak hours could keep electricity supplies affordable and reliable – at least according to battery storage’s proponents.

Sen. Bill Cunningham, D-Chicago, has spent years advocating for more incentives for battery storage. Gov. JB Pritzker, whose office was involved in bill negotiations, in December said he supported the premise of battery storage.

“The price of electricity is going up because of the higher demands, and we have to have a strategy in place to deal with that,” Cunningham said Monday.

A previous version of the bill would have set up a system of incentives and a funding mechanism for battery storage projects, similar to how the state handles renewable energy. That would have included allowing the IPA to “procure” energy credits from battery storage facilities.

The ICC’s report on battery storage will be due to the General Assembly by May 1. That report will then be used as the basis of a future bill from Springfield, according to the bill’s sponsors.

“Nothing in this legislation empowers the IPA to do a procurement. We would have to authorize that by state law,” Cunningham said. “The intent is to come back in the spring and do that.”

‘Big year for climate legislation’

The bill passed Tuesday is also notable for what it didn’t include. In addition to cutting out much of the battery storage policy, the final bill didn’t include a set of provisions dealing with energy efficiency programs.

That portion of the bill would have updated the state’s requirements for solar energy rebates and provided subsidies for consumers who buy efficient appliances.

Those provisions were cut after the governor’s office “raised some concerns,” according to Cunningham.

Those portions of the bill were backed by the Illinois Clean Jobs Coalition, an influential group of environmental organizations that includes the Illinois Environmental Council.

“The bill that we’re going to see is not doing much,” IEC’s Executive Director Jen Walling said Monday morning, after the bill was finalized but before it passed.

The IEC, and the Clean Jobs Coalition more broadly, didn’t endorse the bill, taking a neutral stance. Kady McFadden, a lobbyist speaking on behalf of ICJC, said she was “disappointed” by the final bill, noting the elements that were cut out or pared down.

Walling and others expressed a desire for broader legislation in the spring.

“We’re setting up for a really big year for climate legislation,” Walling said.

The IEC and ICJC brought hundreds of people to the Capitol Tuesday to advocate for other climate- and energy-related bills, including bills limiting the use of natural gas for heating buildings and reforming the transit systems in the Chicago area.

Cunningham is also considering legislation that would boost incentives for transmission line construction, a critical step as the state increasingly relies on renewable generation.

Capitol News Illinois is a nonprofit, nonpartisan news service that distributes state government coverage to hundreds of news outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.