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State Energy Efficiency Policy Database
Illinois
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Advances sound energy efficiency policies, programs, and priorities in the Midwest.
Illinois Utility Policies
Prior to legislation passed in 2007, there was limited funding and associated activity for utility-sector energy efficiency programs. Illinois had little involvement with utility energy efficiency programs, other than a small annual funding requirement (~ $3 million/year) created in the Illinois restructuring legislation (HB262) in 1997 to support some small programs administered by the state Department of Commerce and Economic Opportunity (DCEO).
Legislation passed in 2007 requires substantial electric utility energy efficiency programs. The legislation set an energy efficiency resource standard (EERS) savings goal – beginning at 0.2% of sales per year in 2008 and ramping up to 2.0% of sales per year by 2015. Illinois reported an efficiency budget of $165.5 million for 2009/2010 (Program years are summer to summer, not calendar years). Illinois electric utilities reported efficiency program savings of 553,152 MWh in 2009, a major increase from reported savings of 6,403 MWh in 2008.
According to the Consortium for Energy Efficiency, Illinois utilities budgeted $4.5 million for natural gas energy efficiency programs in 2010. Illinois established a new gas EERS in 2009 with a goal of providing 8.6% cumulative savings by 2020. The state is pilot-testing a natural gas decoupling program. Illinois does not provide shareholder incentives tied to energy efficiency programs.
Reported budgets for energy efficiency programs for 2011, and electricity savings for 2010, are in the State Spending and Savings Tables.
Links:
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October 5, 2012
Illinois passed legislation (SB1592) in July 2007 that created a requirement for large-scale utility energy efficiency programs in Illinois. Illinois electric utilities reported efficiency program savings of 553,152 MWh in 2009 and 671,477 MWh in 2010, equal to 0.4% and 0.5% of sales, respectively.
Individual electric utilities are required to administer 75% of the total funds. The Illinois Department of Commerce and Economic Opportunity (DCEO) administers 25% of the funds, which are used to target government facilities, low-income households, and market transformation-oriented information and training programs.
According to the Consortium for Energy Efficiency, Illinois utilities budgeted $4.5 million for natural gas energy efficiency programs in 2010.
Reported budgets for energy efficiency programs for 2011, and electricity savings for 2010, are in the State Spending and Savings Tables.
Links:
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March 28, 2013
Illinois reported an efficiency budget of $165.5 million for 2009/2010 (Program years are summer to summer, not calendar years).
SB1592 authorizes utilities to recover the costs for providing energy efficiency programs and directs utilities to design and implement cost-recovery tariffs. Funds from the tariffs cover both utility- and state-administered programs. The total charge to customers is limited to 0.5% of their total rate in year one. The cost increases by 0.5% per year until it reaches 2.0% per year in 2015. First-year funding (not on a calendar year) was estimated to be approximately $53 million. (In comparison, the reported spending for 2006 from the preexisting public benefits funding was about $3 million.)
According to the Consortium for Energy Efficiency, Illinois utilities budgeted $4.5 million for natural gas energy efficiency programs in 2010. Reported budgets for energy efficiency programs for 2011 are in the State Spending and Savings Tables.
Links:
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March 28, 2013
Summary: Electric: 0.2% annual savings in 2008, ramping up to 1% in 2012, 2% in 2015 and thereafter. Natural Gas: 8.5% cumulative savings by 2020 (0.2% annual savings in 2011, ramping up to 1.5% in 2019).
The scope of energy efficiency activity in Illinois began a dramatic expansion in July 2007, when the state legislature passed the Illinois Power Agency Act (IPAA), which includes requirements for energy efficiency and demand response programs. The IPAA establishes an EERS that sets incremental annual electric and natural gas savings targets based on previous year’s consumption, beginning on June 1 of that year. The electric savings requirement began at 0.2% in 2008 and ramps up to a requirement of 2% annual savings in 2015 and thereafter. The natural gas goals begin in 2012 with a 0.2% reduction of 2011 sales and ramp up to 1.5% annual savings by 2019.
Investor-owned electric utilities are responsible for roughly 75% of program savings and spending, while the Illinois Department of Commerce and Economic Opportunity (DCEO) administers the remaining 25% of the funds, which are used to for efficiency programs serving government facilities, low-income households, and market transformation-oriented information and training programs.
The rate increase for customers due to energy efficiency is limited by statue to 0.5% of the total ‘per kWh’ charge in the first year and increasing to 2.0% in 2012. If the rate impact cap is reached, the energy savings goals will be relaxed to the maximum savings that can be achieved within the rate impact cap. If, after 2 years, an electric utility fails to meet the efficiency standard it must make a contribution to the Low-Income Home Energy Assistance Program and transfer the program to the Illinois Power Authority.
Links:
- Authority: § 220 ILCS 5/8-103
- Authority: Public Act 96-0033
- Authority: S.B. 1918
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March 28, 2013
In February 2008, North Shore Gas and Peoples Gas and Coke were both approved for four-year revenue-per-customer decoupling pilots. Monthly adjustments began in March 2008. To continue the program after four years, the utility must make a general rate filing in which the commission extends the program. (Cases 07-0241/07-0242 (consolidated) and 09-0166/09-0167 (consolidated)).
No mechanism is in place for electric utilities.
Links:
- Illinois Commerce Commission docket search.
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March 28, 2013
Illinois does not have a mechanism in place for utility shareholder incentives for energy efficiency. SB1592 does not address the issue.
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July 28, 2011
SB1592 establishes a state policy which requires electric utilities to use cost-effective energy efficiency and demand-response measures to reduce direct and indirect costs to consumers. This can be accomplished by avoiding or delaying the need for new generation, transmission, and distribution infrastructure. Because Illinois is still technically a "restructured" state—with distribution utilities purchasing power in competitive wholesale markets—it is not clear how energy efficiency would be factored into resource planning decisions.
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October 5, 2012
- Cost-effectiveness test(s) used: TRC
- Uses a deemed savings database: proposed
The evaluation of ratepayer-funded energy efficiency programs in Illinois relies on both legislative mandates (Public Act 95-0481) and regulatory orders (the order follows the legislation). Evaluations are administered by the utilities and The Department of Commerce and Economic Opportunity. Illinois has established formal rules and procedures for evaluation, which are stated in Case No. 07-0540—Order on Rehearingand SAG’s Proposed Framework to Count Savings in Illinois—most recent version. Evaluations are conducted for each of the utilities. In terms of a benefit-cost test, Illinois relies on the Total Resource Cost (TRC) test and considers it to be its primary cost-effectiveness test. The rules for benefit-cost tests are stated in Public Act 95-0481. These benefit-cost tests are required for overall portfolio level screening.
Links:
- Authority: Public Act 95-0481, August 2007
- Authority: Case No. 07-0540—Order on Rehearing, March 2008
- SAG’s Proposed Framework to Count Savings in Illinois—most recent version
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March 27, 2013