September 8, 2009
Previously published on August 24, 2009
In August 2007, Illinois adopted one of the most aggressive Renewable Energy Portfolio Standards in the country, requiring utilities to provide a steadily increasing percentage of their energy from renewable energy sources each year. On August 9, 2009, Governor Pat Quinn signed new legislation (Public Act 96-0159) that now requires alternative retail electric suppliers (i.e., entities other than Illinois jurisdictional utilities that sell electricity and are certified by the state) to meet the same standards. Accordingly, both utilities and alternative retail electric suppliers must now generate at least 5% of their energy from renewable energy sources by 2010 and 25% by 2025.
The new legislation also sets minimum amounts of energy that both utilities and alternative retail electric suppliers must obtain from specific energy sources. Since 2007, utilities have been required to obtain 75% of their renewable energy from wind. Under the new legislation, alternative retail electric suppliers must now meet a similar requirement and ensure that 60% of the renewable energy they supply is wind generated. Provisions in the new legislation also provide that alternative retail electric suppliers comply with legislation passed earlier this year and “source” some of their energy from clean-coal providers. Finally, the new legislation requires that by June 1, 2015, both utilities and alternative retail electric suppliers obtain 6% of their renewable energy supply from photovoltaics. If an alternative retail electric supplier fails to meet its obligations under the new legislation, the Illinois Commerce Commission can levy a fine or, if the supplier fails to meet its targets more than once in five years, revoke the supplier’s license.
Alternative retail electric suppliers are also limited under the new legislation in how they can meet their renewable energy portfolio obligations. Half of an alternative retail electric supplier’s renewable energy obligations must be met with payments to the Illinois Power Agency Renewable Energy Resource Fund. Illinois then uses that Fund to purchase, to the extent available, renewable energy from generators located in Illinois or adjoining states. An alternative retail electric supplier may then meet the remaining half of its obligations by any combination of self-owned generation, power purchases, or renewable energy credits.
The new legislation further expands a utility’s obligation to reduce its customers’ peak demand. Previously, electric utilities were obligated to implement measures to reduce peak demand by.1% a year for many of their customers that purchase energy under fixed-price bundled tariff services. Now, utilities are required to reduce demand by the same amount for many customers that purchase energy under real-time pricing plans.
Under the new law, utilities, in coordination with the Department of Commerce and Economic opportunity, are obligated to develop energy efficiency measures targeted at families with incomes 80% or less of the area’s median income. The amount that a utility spends on these measures should be “proportionate” to the utility’s annual revenue generated from households at or below 150% of the poverty line.
Finally, provisions in the new legislation also work to ensure that Tenaska Inc.’s proposed Taylorville coal gasification plant effectively captures carbon emissions. As proposed, the Taylorville plant will be capable of capturing 60% of its carbon emissions. Under the new law, the Taylorville plant must buy carbon offsets if it fails to capture at least 50% of its carbon emissions in a given year.
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