Bill Summary

Last week during the final day of the annual veto session, the with major emphasis on energy conservation and clean renewable energy.Approximately 70% of the funds from the overall legislation will focus on kick starting clean energy, which dwarfs the dollars going to aid the two nuclear plants, and will help chart the path toward a clean, modern energy economy for decades to come—bringing tens of thousands of new jobs, billions in private investments, cleaner air and needed savings on monthly electricity bills, statewide.

Energy Efficiency

The crux of the bill is about getting smarter on how we generate, consume, and think about energy in Illinois—and one of the smartest things we can do is cut energy waste out of the system to avoid pollution and drive down cost. Energy efficiency is a resource that avoids the need to mine or burn dangerous fuels in the first place and has been one of the most potent policies the State of Illinois adopted to curb climate change—which just get a mega expansion.

When enacted, Illinois will have the distinction of one of the top energy efficiency programs in the entire nation, building on the success of laws put in place in 2007 that helped build a local clean energy workforce of more than 85,000 jobs state-wide, two billion in consumer savings, and the lowest electric rates in the entire Midwest. With this new paradigm for energy efficiency, we will further expand the number of jobs and savings by ushering in tens of thousands of new workers that will be focused on saving consumers and businesses money. Money saved on monthly utility bills is money that can now be spent elsewhere to further stimulate the state and local economies, which is yet another added benefit of energy efficiency.

All utility customers, both large and small for ComEd and Ameren, benefit from energy efficiency even if they do not install energy efficient LED light bulbs, add insulation to a building or get rid of their old inefficient appliances; although we hope they make such improvements. It’s the basic principles of economics; reducing overall energy consumption also reduces the overall price for electricity and utility infrastructure costs, which in turn lowers everyone’s monthly utility bills. The findings of independent experts commissioned by NRDC show for every $1 ComEd will spend on energy efficiency programs, monthly utility bills will be reduced by $3. That’s a fantastic investment from the consumer point of view and a principal reason why our friends at the Citizens Utility Board (CUB)along with NRDC and many others fought hard for the inclusion of robust energy efficiency standards. The bottom line is, when we all use lessenergy; we all pay less for it.

Commonwealth Edison (ComEd), one of the nation’s largest electricutilities, will be required to reduce demand by achieving an impressive21.5% reduction in energy use by 2030. What is slightly less impressive is the meager improvement for the electric utility serving central and southern Illinois, Ameren, which committed to achieve a 16% reduction in energy use by 2030, though like ComEd, with a significantly larger exemption for our state’s largest energy consumers, which should be remedied to ensure residential customers and small businesses are not subsidizing the price of electricity for our state’s biggest energy hogs.

These new energy savings measures are expected to help deliver nearly$15 in net annual savings for every household in ComEd’s service territory (projected monthly savings are net of “all” costs from the entire Future Energy Jobs legislation).

Some additional details on changes to the energy efficiency programs:

The new legislation incentivizes utilities to achieve more energy efficiency savings for its customers, with performance-based bonuses for exceeding annual energy saving targets, and financial penalties for falling short. That means the electric utilities are no longer rewarded for selling power, because that linkage has been broken and a utility can be rewarded for selling less power, subject to how much energy they reduce which is measured in steep annual goals.

This new business model ensures an aggressive structure to incentive the kind of services consumers and business want: energy savings tools and lower energy prices.

Thanks to the hard work of our partners at Elevate Energy, LVEJO and others, the bill requires a minimum $25 million per year to be spent exclusively on programs to increase the efficiency of low-income households for ComEd customers, which has a multitude of benefits including increased comfort during the upcoming winter—think of drafty inefficient windows.

The bill also requires 10% of the overall budget be used to incentivize local governments to save energy and lower overhead costs.

It expands on-bill financing options to allow homeowners to pay backcosts of home upgrades on their electric bill giving greateroptionality for anyone looking to make home efficiency improvements but can’t afford a big upfront investment.

The new legislation also has caps that limit how much each utility can spend on energy efficiency, which could limit the utilities overall ability to achieve their annual goals, albeit with significantly larger annual investments under the new caps.

The bill also allows our state’s largest energy consumers (10 megawatts or above) to opt-out of the programs entirely or self-direct their energy efficiency dollars, which could undercut the level of savings each utility is able to achieve and could lead to cross subsidies that hurt consumers and small businesses.