Illinois Enacts Wide-Ranging Energy Legislation Addressing Renewables, Decarbonization, Electric Vehicles, and More

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This is the first in a series of client alerts from Quarles & Brady concerning the approximately 1,000-page Illinois omnibus energy legislation commonly referred to as The Climate and Equitable Jobs Act (“CEJA”). This alert provides an overview of the legislation’s key measures. Subsequent alerts will focus on and contain greater detail concerning the legislation’s subject areas.
 

On September 13, 2021, the Illinois General Assembly passed CEJA -- legislation containing sweeping changes to Illinois’ energy policy, funding, and regulation regarding renewables, decarbonization, electric vehicles, energy efficiency, utility rates and operations, and other subject areas. On September 15, 2021, Illinois Governor Pritzker signed CEJA, and it became law.

CEJA’s overarching policy objective is to put Illinois on a path to 100% carbon-free energy by 2050. The legislation includes the following key measures:

  • Implements measures designed to increase the pace of renewable energy development in Illinois, putting the State on target to reach 40% renewable energy by 2030 and 50% by 2040.
  • Doubles the State’s investment in renewables by directing approximately $350 million annually to the Illinois Power Agency for the procurement of Renewable Energy Credits (“RECs”) from wind and solar projects, including from utility-scale, brownfield, community, and distributed generation solar projects.
  • Authorizes approximately $700 million in financial support over five years for three nuclear power plants located in the State. This is essentially an expansion of the 2016 Illinois legislation known as the Future Energy Jobs Act (“FEJA”) that implemented a similar funding mechanism for two other Illinois nuclear plants.
  • Establishes a goal of one million electric vehicles in Illinois by 2030.
  • Provides a $4,000 rebate to Chicagoland residents that purchase an electric vehicle in Illinois.
  • Requires the closure of all private coal-fired power plants by 2030 and all private gas-fired power plants by 2045.
  • Extends Illinois’ energy efficiency goals until 2040 and allows large industrial customers to opt out of the utilities’ energy efficiency programs and develop their own plans instead.
  • Ends formula ratemaking for Illinois’ largest electric utilities and transitions them to performance-based ratemaking.
  • Establishes a self-direct program for large industrial customers to offset a portion of the renewables-related surcharges on their electricity bills through purchase of RECs from utility-scale renewables projects.
  • Creates a variety of programs and incentives focused on equity issues and workforce development in renewable energy deployment in Illinois.

The implementation of CEJA will involve numerous formal and informal regulatory proceedings, rulemakings, workshops, working groups, and committees. These will occur in a number of forums, including the Illinois Commerce Commission, the Illinois Power Agency, the Illinois Environmental Protection Agency, the Illinois Department of Commerce and Economic Opportunity, and other agencies.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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