May 29, 2015

‘Clean Jobs Bill’ would pass increases on to customers; Critic says costs of meeting new standards ‘outrageous’

By Ann Maher and Steve Korris | The Madison-St. Clair Record | 05/28/15 |

SPRINGFIELD – Everyone with electric power would pay more for wind turbines and other renewable energy sources under proposed legislation at the Illinois General Assembly.

Although law makers supporting the measure are not promoting it that way, the bill under consideration would provide for adoption of a plan setting goals and authorizing “all renewable energy credits necessary” to meet them.

Utilities would pass the costs to customers, as they do under current energy efficiency law.

Sen. Don Harmon (D-Oak Park) and Rep. Elaine Nekritz (D-Northbrook) are chief sponsors in identical bills pending in both chambers.

Rep. Eddie Jackson (D-East St. Louis) added his name as co-sponsor in March, and Rep. Jay Hoffman (D-Swansea) added his name on May 12.

The Senate bill has advanced through two readings, with a May 31 deadline for a third.

Sen. Kyle McCarter (R-Lebanon) cast the only “no” vote at a committee hearing in March.

In a phone interview, McCarter said proponents “ignore the reality” that significant costs would be passed on to end users if the state adopts a 35 percent renewable energy standard by 2030.

“If we shift to 35 percent the cost is going to be outrageous,” he said.

He added that he is not “big fan” of wind power, a sentiment he said is shared by some property owners who live near wind mills.

McCarter said that the flicker effect – where shadows cast by the rotation of blades can have the same effect as the constant turning on and off of lights inside a home – as well as excessive noise are “running some people out” of their homes in Illinois.

The state’s current energy efficiency policy statement declares that, “It serves the public interest to allow electric utilities to recover costs for reasonably and prudently incurred expenses for energy efficiency and demand response measures.”

It further states that such measures decrease environmental impacts, reduce prices, and avoid or delay the need for new infrastructure.

The proposed legislation is being called the “Clean Jobs Bill” because of a promise of creating tens of thousands of new jobs.

“This bill will create thousands of new jobs in the clean energy industries, it will save consumers money on their electric bills, and it will deliver huge public health benefits by reducing dangerous carbon pollution,” said co-sponsor Rep. Rita Mayfield (D-Waukegan) at a “clean jobs” forum last month.

Proponents of the bill have suggested that 32,000 new jobs would be added to a renewable sector that a group called Clean Energy Trust estimates to be close to 100,000 in Illinois.

McCarter said that renewable energy currently only supplies at most 7 percent of the state’s energy. He said that some estimate it is as low as 2 percent.

“It’s going to cost us 500 times the manpower” to get to the 35 percent standard as proposed, he said.

Michael Lucci, Director of Jobs and Growth for the Illinois Policy Institute, said there needs to be a price tag put on the transformations described in the bill.

He said that other states have done so and have found it to be very costly. In Wisconsin, a state which he said has laid out a less ambitious program than what is being proposed in Illinois, researchers found the cost to consumers to be in the billions.

“No one is talking about the cost,” Lucci said. “They’re not even asking for research because they will find nasty numbers.”

The “mature” thing to do would be to conduct “very serious research,” Lucci said.

He also argued that the marketplace would already be offering what is being proposed if it was economically feasible.

Transforming energy policy

The proposed legislation would authorize “competitive procurement events” to sell energy credits.

Credits would initially equal 11.5 percent of projected deliveries to all customers, and they would increase to 25 percent in 2025 and 35 percent in 2030.

Three fourths of credits would come from wind generation by 2020, with a fourth of the wind credits coming from new projects.

The cost of credits could not exceed benchmarks that a procurement administrator would establish in consultation with Illinois Commerce Commission, Illinois Power Agency, and a procurement monitor.

“The benchmarks shall be confidential, but shall be provided to the Commission and shall be subject to Commission review and approval prior to a procurement event,” the bill states.

It would allocate an eighth of the state’s energy efficiency portfolio to programs that serve low income residential customers.

It would give the power agency an option to consider public interest factors when selecting bidders.

These factors might include fuel diversity, system reliability and resiliency, and “a cleaner and healthier environment for the citizens of Illinois.”

The bill would provide that, “In its long term plan, the agency shall develop the method for incorporating these public interest factors, in addition to bid price, into its bid selection process.”

It would call for utilities to reduce peak load by 20 percent in 2025, with annual reports tracking their progress.

Utilities would send annual third party evaluations of their energy savings to the commerce commission, which could hold a hearing on any objection.

Utilities would include opportunities for a diverse set of buildings including hospitals, health care facilities, long term care facilities, local governments, schools, parks, museums, child care facilities, churches, and water treatment plants.

They would consult with Illinois Commission on Environmental Justice and other entities that participate in commerce commission proceedings.

Utilities would propose metrics, “designed to align financial rewards with the utility’s performance.”

Wind would get most of the credits but sun would power two new programs.

A “declining block program” would provide credits for community solar projects and for solar devices with capacities less than 2,000 kilowatts.

According to the bill, the program would “expand renewable generating facility access to a broader group of energy consumers, including those who cannot install renewable energy on their own properties, while prioritizing those persons most sensitive to market barriers.”

A low income solar program would provide credits for projects offsetting electricity use in households below 80 percent of area median income.

According to the bill, the program would develop new generating facilities and work force opportunities.

All new projects would pay prevailing union wages.

Every four years the Department of Commerce and Economic Opportunity would publish a study assessing job creation.

“The Department shall seek input from stakeholders in advance of conducting the study,” the bill states.

The bill would authorize the commerce commission to carry out the law on an emergency basis immediately following its effective date.

The last piece of the bill anticipates that the U.S. Environmental Protection Agency would change its rules on carbon dioxide emissions.

The bill would authorize Illinois EPA to comply by creating a “cap and invest program or similar market mechanism.”

It would authorize Illinois EPA to evaluate, establish, implement and manage an annual cap on carbon dioxide emissions.

It would authorize auctions of carbon dioxide allowances, on a regional basis if that would reduce emissions and costs.

It would authorize investment of auction proceeds in strategies to meet goals, create jobs, “and mitigate adverse health and economic impacts of fossil fuel fired power plants on minority and low income communities.”

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