Illinois' energy procurement process serves essentially the same function as Integrated Resource Planning (IRP) though it isn't strictly a traditional IRP process. Each Illinois utility procuring power must provide the Illinois Power Agency (IPA) with an annual assessment of cost-effective energy efficiency programs or measures that could be included in the procurement plan. One required component is an energy efficiency potential study for the utility's service territory.
Beginning in 2012, the Public Utilities Act requires that procurement plans must include an analysis of the impact of building energy codes or appliance standards, as well as an assessment of opportunities to expand energy efficiency programs.
In the prepared procurement plan, the IPA must include energy efficiency programs and measures what it deems cost-effective and associated annual energy savings goals. The commission approves the energy efficiency programs and measures included in the procurement plan, including the annual energy savings goal.
Energy Efficiency Standards
The Future Energy Jobs bill, passed in December 2016, will significantly amend the Illinois Power Agency Act and Public Utilities Act, effective June 1, 2017. The law requires that ComEd attain 21.5% cumulative annual persisting savings by 2030 and that Ameren Illinois ramp up to 16% cumulative annual persisting savings by 2030. Targets for the gas utilities remain the same. Additional amendments include changes to the rate impact cap, exempting customers with peak demand over 10 MW, and the administration of programs serving public buildings and low-income sector customers among other items.
The Illinois Power Agency Act enacted an energy efficiency resource standard (EERS) in 2007 for investor-owned electric utilities with efficiency programs beginning in 2008. The standard requires 0.2% electricity savings through efficiency of energy delivered in 2009 and ramped-up to 2.0% by 2015 and every subsequent year.
Spending for electric energy efficiency programs in Illinois is capped at a maximum rate impact of 2.015%.
In 2009, Illinois’ energy efficiency standard was amended to include investor-owned natural gas utilities, and programs under the standard began in 2010. This required a 0.2% natural gas savings through efficiency of energy delivered by 2012 and ramps-up to 1.5% savings by 2019 and every subsequent year. Spending for natural gas energy efficiency programs in Illinois is capped at a maximum rate impact of 2.0%.Rate Structures & Incentives
As authorized by the Public Utilities Act, utility providing energy efficiency measures is permitted to recover the costs of those measures through an automatic adjustment clause tariff filed with and approved by the ICC, which must be established outside the context of a general rate case. Each year the ICC initiates a review to reconcile any amounts collected with the actual costs and determines the required adjustment to the annual tariff factor to match annual expenditures.
Lost Revenue Recovery
There are no policies that specifically support lost revenue recovery mechanisms in Illinois. However, revenue-per-customer decoupling pilot programs have been approved by the ICC as part of rate cases.
As passed in 2007, the Public Utilities Act did not include incentives for utilities achieving energy savings beyond their goals set forth in the legislation.
Illinois is the only state in the Midwest to have a statutory penalty for noncompliance with energy efficiency standards. Utilities that fail to file a plan can be fined $100,000 per day of noncompliance, and if they fail to meet their energy efficiency goals, they are required to make a contribution to low-income home energy assistance programs (value determined by the size of the utility) and may have their energy efficiency programs put under third-party administration.
The Illinois Energy Efficiency Stakeholder Advisory Group (SAG) includes representatives from utilities, the Illinois Commerce Commission staff, the Department of Commerce and Economic Opportunity, environmental advocates and energy efficiency consultants.
The SAG, which has met monthly since 2008, shares information and experience among energy efficiency stakeholders. It developed a Technical Resource Manual for the state's utilities and discusses EM&V and other technical issues related to energy efficiency programs.
Cost Effectiveness Tests
Utilities in Illinois are required by statute to use the TRC test to establish the cost-effectiveness of energy efficiency programs. Other tests may be used by utilities for their internal program design and evaluation purposes but are not required by the commission.
Net vs. Gross
Illinois utilities report net savings in their program evaluation reports to the commission. Free-ridership is measured but spillover generally is not, though in a few cases utilities have measured it for some programs.
Technical Resource Manual
The Stakeholder Advisory Group in Illinois headed up the development of a statewide TRM which was finalized in the summer of 2012. In the spring of 2016, the SAG initiated a process for updating the TRM. The TRM, and the schedule for the TRM 6.0 update, are available from the SAG website.
State Energy Office
State Energy Plan or Vision
In early 2016, the Illinois Department of Commerce and Economic Opportunity (DCEO) began work on the Illinois Energy Roadmap Project to chart the future direction of the energy sector in Illinois. The Illinois Energy Roadmap places an emphasis on the electric power sector as well as natural gas supply and transport and includes a discussion on how to optimize energy efficiency and renewable energy resources.
State Agency Energy Reduction Requirement
The 2007 State Agency Energy Efficiency Act directly addresses energy efficiency in state government. It directs all executive-branch state agencies to set a goal of reducing energy use by 10% by 2018. It also requires state agencies to purchase ENERGY STAR®-rated equipment. This goal was updated in 2009 to 20% energy reduction by 2020 for state facilities and directed the Department of Central Management Services to implement a program to increase energy efficiency, track and reduce energy usage and improve energy procurement for all state-owned and state-leased facilities.
Governor Quinn expanded the targets in 2009 with Executive Order 7, which set a goal of a 20% energy reduction by 2020 for state facilities and directed the Department of Central Management Services to implement a program to increase energy efficiency, track and reduce energy usage, and improve energy procurement for all State-owned and State-leased facilities.
EE in New State Buildings
Illinois' Green Buildings Act requires that all state-funded new construction or major renovation buildings are to seek LEED, Green Globes or similar green building certification. New buildings and renovation less than 10,000 sq. ft. must follow the guidelines for the highest level of LEED (or equivalent standard) that is practical, though they do not have to seek certification. Buildings or renovations larger than 10,000 sq. ft. must be LEED Silver (or two Green Globes) certified and must receive all of the LEED credits that have been deemed mandatory by the Capital Development Board.
Key Policymaker Contacts
- Illinois Energy Roadmap Project
- Illinois Commerce Commission
- Governor's Office
- Illinois House Leadership
- Illinois Senate Leadership
- House Energy Committee
- House Public Utilities Committee
- Senate Energy and Public Utilities Committee
- State Energy Office- Department of Commerce and Economic Opportunity- DCEO