Illinois lawmakers just passed another big clean-energy bill

Illinois legislators passed a major energy bill that creates grid-battery and geothermal incentives and a virtual-power-plant program, during the final hours of a fall veto session Thursday.

The legislation faced substantial pushback, largely because of concerns about the costs imposed on residential and industrial customers to fund the energy-storage incentives. It also faced stiff competition for legislators’ attention during the six-day veto session, as bills related to a transit-funding emergency, a new stadium, and insurance regulation were also on the table.

The state House passed the bill on the second-to-last day of the October veto session, and the state Senate passed it in the final hours on Oct. 30. Gov. JB Pritzker, a Democrat, has pledged to sign the bill.

The Clean and Reliable Grid Affordability Act, or CRGA, calls for the procurement of 3 gigawatts of energy storage by 2030.

The Illinois Power Agency, which procures electricity on behalf of the state’s two major utilities, ComEd and Ameren, estimates that developing and operating the storage will cost $9.7 billion over 20 years. That money will be collected from utility customers through a new charge on their electricity bills. But under the incentive structure, a portion of the revenue earned by the storage companies will go back to consumers. With this factored in, customers will end up paying an estimated $1 billion for the storage.

Meanwhile, energy storage connected to the grid will save those same customers an estimated $13.4 billion over 20 years, since the influx of electricity into ​“capacity markets” will suppress prices, the Illinois Power Agency predicted. Capacity markets are run by regional grid operators to make sure enough power is available to meet future demand.

“Is there a way of demonstrating that we’re going to be able to get a benefit for consumers in all of this?” asked Pruitt. ​“That was an honest concern by many of the policymakers. When do consumers start to see a benefit, and will they see lower costs? I don’t know that prices are coming down; it’s a question of can you slow their rate of increase.”

The credit structure meant to incentivize storage under the bill is already being used as part of the state’s subsidy program to keep existing nuclear plants online, which got started in 2021. At the time, watchdog groups worried the mechanism would cost households money, but the arrangement has actually benefited consumers.

Energy-storage deployment is central to the virtual-power-plant program created by the bill, wherein homes and businesses with batteries can earn revenue by supplying energy to the grid when needed. The bill also, for the first time, makes geothermal eligible for state renewable-energy incentives. And it lifts a decades-old moratorium on the construction of large nuclear plants. The legislature had revised the moratorium in 2023 to allow small modular nuclear reactors to be built, though this technology is still nascent.

Legislators’ approval of CRGA ​“is a major step toward strengthening Illinois’ power grid and keeping energy costs in check,” said Hannah Flath, climate communications manager of the Illinois Environmental Council, a group of over 100 environmental organizations working on policy and advocacy. ​“Battery storage represents the next phase of Illinois’ clean-energy buildout, ensuring that clean power is available around the clock.”