Ill. bill calls for cap-and-invest program to meet EPA carbon goal

By Jeffrey Tomich | 02/20/2015 08:39 AM EST

A bipartisan group of almost three dozen Illinois lawmakers yesterday proposed measures that would expand the state’s energy efficiency and renewable energy requirements and establish a carbon market to help the state comply with U.S. EPA’s Clean Power Plan.

S.B. 1485 and H.B. 2607 specifically directs the Illinois EPA to develop a market-based approach to comply with EPA’s proposal to limit carbon dioxide emissions from existing power plants.

The program would include a cap on carbon emissions and an auction of allowances with about two-thirds of the proceeds directed to be spent on renewable energy and efficiency. Other proceeds would go for low-income utility bill assistance, to help communities affected by power plant pollution and for workforce development.


The legislation is being pushed by a recently announced coalition led by environmental and clean energy advocates. Other notable members of the group include Chicago Mayor Rahm Emmanuel and the Citizens Utility Board, a consumer advocate (EnergyWire, Feb. 6).

Jack Darin, director of the Sierra Club’s Illinois chapter, said the legislation introduced yesterday will accomplish several important policy goals. It will reduce greenhouse gas emissions, create jobs and help continue the long-term, transformation of the state’s energy sector.

Beside the carbon market proposal, the bills would require a 20 percent reduction in electricity use by 2025 — a 50 percent increase in energy savings compared with what would occur under existing policies. It would also expand Illinois’ renewable energy standard to 35 percent by 2030. Illinois law requires 25 percent of electricity sales in parts of the state served by investor-owned utilities to come from renewable resources by 2025.

"We think that the three major pillars of this proposal work well together," Darin said.

The cap-and-invest proposal would establish a policy framework to enable the state EPA to meet carbon reduction targets. As such, it represents one of the most specific plans put forward aimed at compliance with the Clean Power Plan.

"This could be the overall umbrella," Darin said, noting that it’s a concept that "would need a lot more development and discussion."

Unlike California’s broader cap-and-trade program, the Illinois proposal would be limited to the electricity sector. Carbon offsets would be prohibited and there would be no free allowances.

The legislation also specifically allows Illinois to enter multi-state agreements for the purpose of compliance if it’s proven to be in the state’s best interest.

Former Illinois Commerce Commission Chairman Doug Scott led a group of state regulators looking at options for multi-state collaboration on Clean Power Plan compliance (EnergyWire, Dec. 3, 2014).

The Illinois clean energy bill, announced at a news conference at the state capitol, is just one of at least two major energy-related bills expected to be filed this spring.

Last Friday, Chicago-based Exelon Corp. said there would be a bipartisan bill filed within the next month aimed at improving the competitiveness of its Illinois nuclear fleet (EnergyWire, Feb. 17).

The company has warned over the past year that it may be forced to close three of its six Illinois nuclear plants unless it sees a pathway to sustained profits. The plants have sustained losses in recent years because of pressure from relatively inexpensive natural gas and wind power.

In an emailed statement, Exelon spokesman Paul Elsberg said the power producer supports maintaining the state’s position as a leader on clean energy — a future that must include nuclear power.

"Illinois cannot achieve its clean energy goals without nuclear energy," the statement said. "In Illinois, over 90 percent of the emissions free electricity is produced by six state-of-the-art nuclear plants. Today, some of these plants are at risk of closure because nuclear energy has been excluded from many of Illinois’ programs that support other zero-carbon resources."

A spokeswoman at Dynegy Inc., which owns the state’s largest fleet of coal-fired power plants, said the company needed more time to review the legislation before commenting on it.

Representative of the clean energy coalition briefed Exelon and other energy company representatives Wednesday, Darin said. But the group didn’t formally solicit support for the bill.