Illinois’ new green energy law will increase your utility bill, but how much and why?
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Green energy law in Illinois
Read stories about the new green energy law in Illinois.
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Illinois lawmakers passed a green energy bill in September that will force fossil fuel plants to close by 2045 and put billions toward renewable energy and nuclear plants.
It includes incentives for buying electric vehicles and pays to retrain workers as the state phases out fossil fuel burning.
It’s also expected to cause an uptick in residents’ monthly utility bills.
The bill’s sponsors and other groups disagree on how much it will cost consumers, with estimates ranging from $3.51 to nearly $15 per month.
Here’s a look at each of the estimates and how they were calculated.
Illinois AARP: $4 to $15
A consultant for the Illinois chapter of AARP, the interest group that advocates for older Americans, added the costs of transitioning from coal to solar, energy efficiency programs, nuclear incentives and renewable energy investments, among other measures.
Much depends on how Ameren and Commonwealth Edison, or ComEd, calculate their rates, according to Chicago-based consultant Jeff Orcutt of Chapman Energy Strategies.
The utilities will have the option of switching to a new performance-based system for setting rates. It ties a portion of the utility’s profits to goals, such transitioning to renewable energy.
In essence, this system would allow utilities to spend more to meet goals and adjust rates accordingly, according to the AARP analysis. How well that spending helps them exceed or fall short of those targets can also increase or decrease their profits.
While other programs included in the bill are also costly, this measure would be the most expensive, the analysis of past Ameren and ComEd profits showed. Even if utilities keep their traditional rate-setting system, costs would increase similarly.
With all those costs considered, the AARP analysis found an average residential Ameren customer would pay $4.03 per month more in 2022. Over the next 10 years, that monthly bill would increase to $9.76.
ComEd customers would see a $5.97 monthly increase next year that would grow to $14.73 per month. Of the $14.73 increase, ComEd’s rates based on profit accounts for more than $9.
“Our members are deeply concerned and dismayed about their utility bills, which keep going up without any explanation or consumer input,” Illinois AARP state director Bob Gallo said in a news release. “But they are equally frustrated that their elected officials continually act in the best interest of ComEd and other big utilities, which use unfair lobbying practices and not on behalf of the residents.”
Citizens Utility Board: $3.51
The Citizens Utility Board, an Illinois consumer advocate organization, estimates the average residential customer in Illinois would see a monthly increase of $3.51 over the next five years.
The analysis included the cost of transitioning to renewables, financial support for nuclear plants, and increases in energy efficiency. Some of those savings could occur simultaneously with the law’s implementation, while others could take a year or more.
The board’s estimate does not include savings from energy efficiency and money saved once solar energy starts paying for itself. Once those are in place, the law should save consumers money, according to the analysis.
CUB Executive Director David Kolata said they didn’t include the potential change to rates that AARP used in its estimates because they it could happen regardless of the law, depending on approval by the Illinois Commerce Commission, the state’s utility regulatory body.
“It’s a little bit of an apples and oranges comparison,” Kolata said. “If the utilities move forward with certain kinds of rate cases at the ICC, this is what could happen and you could see very large increases. But none of that is in the bill that just passed. That’s the case right now.”
The board broke down the average monthly increase for a residential customer by year from 2021 to 2027.
2021-2022: $3.00
2022-2023: $3.97
2023-2024: $3.97
2024-2025: $3.78
2025-2026: $3.48
2026-2027: $3.18
This story was originally published October 29, 2021 at 5:00 AM.
