Illinois Clean Energy Jobs Act Would Put State on Path to 100% Renewable Energy by 2050, at the Expense of RatepayersMay 16, 2019
Written by: John O’Connell, Strategic Initiatives Manager
The Act pushes the state’s renewable standards forward aggressively, with goals of 25% renewable generation by 2025, 45% by 2030, and 100% by 2050. Along with increased renewable energy development, the bill calls for increased energy storage, demand response, energy efficiency, rate structures and other programs to assist in this shift.
The Clean Energy Jobs Act would also significantly alter the current relationship between IL and PJM Interconnection, the individual service operator of the regional electric grid serving 13 states and Washington D.C. PJM currently oversees the day-to-day operations of the system, which includes annual capacity auctions.
Capacity represents a commitment of resources to deliver power when needed, particularly in the case of a grid emergency. For example, a shopping mall takes on the cost to build enough parking spaces to be filled at its busiest time – Black Friday. The spaces are there when needed, but they are not necessarily used all year round. Similarly, PJM needs to ensure that there is enough power generated and available on the grid to ensure that the demand for electricity can be met at all times.
Critics in Illinois have long said that PJM’s national scope auctions do not offer enough flexibility to states with lofty renewable energy goals, like IL. States with higher amounts of renewable power generation may not be able to meet certain demand requirements due to the intermittent nature of their generation, as opposed to fossil fuel generation which is generally available.
If the Clean Energy Jobs act passes, the IL Power Agency will be tasked with creating an alternate capacity auction for the state that is aligned with their renewable goals. However, Experts do not agree on whether the IL Power Agency has the expertise to run these capacity auctions. If the bill passes, it would be expected that the first capacity auction conducted will be for the delivery year beginning on June 1, 2022. The alterations to the capacity market, coupled with the increased renewable goals, could spell drastic cost increases to ratepayers over the next 3-5 years. The expected increase in capacity and renewable costs will likely be reflected in higher utility and third party supply pricing.
To learn more about the IL Clean Energy Jobs Act and how you can take steps to mitigate your budget increases, call Transparent Energy at (862)210-8770.
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Thill, David. “What’s at Stake for Illinois as FERC Considers PJM Capacity Market Changes.” Energy News Network, 28 Jan. 2019, energynews.us/2019/01/29/midwest/whats-at-stake-for-illinois-as-ferc-considers-pjm-capacity-market-changes/.
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