Illinois Electricity 103: The Long-Term Plan & CRGA

What’s working, what isn’t, and what’s CRGA?

Welcome back to our final installment of the Illinois Blog Series! Today’s blog will focus on where our renewables planning is falling short on delivering a cleaner, more affordable energy future and how a bill up for a vote this week – the Clean and Reliable Grid Affordability Act would fix that.

First, a quick reminder, the ICC and IPA play key roles in the electric grid, such as: 

• Regulating investor-owned utilities’ rate hikes and grid investments
• Providing a blueprint (called the Long-Term Plan) for the state to achieve its clean energy goals
•  Ensuring various renewable energy projects follow equity provisions
•  Sourcing energy for residential customers

Now, let’s zoom in on the Long-Term Plan and get a better understanding of why it matters! 

The Long-Term Plan (or Long-Term Renewable Resources Procurement Plan) is a nearly 400-page document that guides the IPA in developing renewable energy programs to achieve the clean energy goals laid out in CEJA, the Clean and Equitable Jobs Act. And those programs achieve those goals through the procurement of Renewable Energy Credits or RECs.

A REC represents the environmental value of renewable electricity. More specifically, one REC equals one megawatt-hour of clean energy generated by a renewable system. The more energy a project produces, the more RECs it earns. And Illinois utilities “retire” these RECs against the energy they procure from the grid to meet Illinois clean energy goals. Furthermore, RECs are important because they provide an additional source of revenue for developers to build and sustain solar and wind projects. Their procurement can also be designed to offset upfront costs, making it possible to bring more clean energy to communities – including low-income households that have historically faced higher energy burdens.

At its core, the Long-Term-Plan determines how many RECs Illinois utilities procure and how we pay for those RECs.    

The Long-Term Plan assigns RECs a monetary value. For example:

• A small rooftop solar system might earn about $66 per REC.
• Solar projects at public schools can earn around $77 per REC.
• Projects that serve low-income residents through the Illinois Solar for All program receive even higher REC prices to reflect their added community benefit.
• Note: Very large renewable energy projects (also called utility-scale projects) are more complex; developers propose their projects based on construction costs and other factors (i.e. bidding their projects). The IPA then selects the lowest bid projects, which determine how much these RECs are valued.

These differences ensure that Illinois invests where it’s needed most — encouraging growth across residential, community, and public-sector solar.

Through the Long-Term Plan, the IPA sets the REC prices at different levels based on which types of projects are needed to meet the state’s clean energy goals. RECs saved for rooftop solar, community solar, and public schools/nonprofit/public buildings have fixed REC prices. For utility-sized renewable projects, RECs are flexible. As described above, these RECs are called “indexed RECs” and are determined by a pool of proposed projects, with the lowest cost projects being selected and determining the REC prices. All of these RECs come from a public fund called the “Renewable Portfolio Standard Budget”, or RPS budget. Ratepayers pay into the RPS budget every month and are held by your utility. The funds would then be paid out to qualified projects, as laid out by the Long-Term Plan. This structure makes the Long-Term Plan the backbone of Illinois’s clean energy growth – defining how, where, and at what pace the state meets its clean energy goals.

Unfortunately, over the last few years, Illinois is not on pace to reach its clean energy goals. Certain projects, such as solar for public schools, are not being built at the speed we need. Additionally, via indexed RECs, utility scale projects are more expensive than anticipated. The fluctuating electricity market, coupled with increasing costs for developing renewable projects, created an unseen rise in these REC prices. So much so that the RPS budget is being depleted way too quickly. By 2027, we could see the RPS budget hit $0, which means the IPA would not be able to incentivize new renewable energy projects!

This is where the Clean and Reliable Grid Affordability (CRGA) Act comes in. Not only is Illinois falling behind on its targets to build out renewable energy, but energy-intensive data centers are connecting to the grid at an unprecedented rate. Because of this, the state and its residents are facing a strained electric grid that needs help. The CRGA Act sets up Illinois to address the incoming needs of the grid, manage the RPS budget, and respond to steadily increasing customer bills. 

First, the bill creates a roadmap for the state to speed up the buildout of renewable energy projects. This also includes energy storage goals that can be used to ease demand on the grid. The CRGA Act also launches a virtual power plant (VPP) program, where residents with solar and battery systems can help support the grid at times when there is high energy demand while being compensated fairly, benefiting everyone on the grid. 

In addition, to aid the RPS budget— which, as mentioned before, is on its way to zero dollars— an existing Zero Emissions Credits (ZECs) budget will be shifted over to this budget, and an inflation adjustment will be applied. These additions will allow the IPA to procure new renewable projects for the next few years, giving us time to conduct an energy resource planning case. This resource planning case will also be  mandated in the CRGA Act, allowing the ICC to kick off this case next year. Resource planning is critical for Illinois because it will provide a series of roadmaps that highlight how the state can manage future energy needs and balance electricity rates.  

Finally, the CRGA Act lays out a series of programs and initiatives that expand ratepayer protections. The bill strengthens energy efficiency programs, which help customers afford house upgrades, such as insulation and installing more efficient appliances. The CRGA Act will also create a “time of use” rate for customers, which will provide opportunities for ratepayers to shift their energy use towards cheaper parts of the day and lower their electric bills. In total, the IPA estimates that the CRGA Act will save Ameren Illinois customers up to $10.59 a month by 2030, and save ComEd customers up to $3.75 a month by 2030.

Illinois began its clean energy journey with FEJA in 2016 and expanded with CEJA in 2021. But even with these wins, the electric grid is struggling to keep bills low. Oncoming data centers connecting to the grid are using unprecedented amounts of energy. As this demand grows, bills are rising and our grid is struggling to hook up renewable energy projects. The CRGA Act is the only way we can protect Illinoisans from drastic bill increases and get the state back on track with its renewable energy goals. It is up to legislators to protect our communities; they must pass the CRGA Act.