State of the State: Illinois Tops Nation for Locales Buying Renewable Energy

Apr 1, 2014

Jamey Dunn
Credit mattpenning.com 2014 / WUIS/Illinois Issues
When Earth Day rolls around later this month, Illinois has some reason to celebrate. The state has the most communities buying only renewable energy out of any in the nation. 

In Illinois, 91 local governments have opted to allow their residents access to 100 percent renewable electricity, by either buying it directly or buying credits intended to fund renewable projects. More than 1.7 million people live in those 91 communities. 

The shift to renewable power was made possible by a 2009 law that allows county and municipal governments to purchase their own electricity instead of relying on a statewide purchaser. The law allows a local government to pool the purchasing power of residents and eligible local businesses to potentially get lower rates. It also enables many local governments to purchase more power from renewable sources. 

“Without fanfare, 91 local governments in Illinois have decided that renewable electricity is the best option,” says Keya Chatterjee, director of renewable energy and footprint outreach at World Wildlife Fund. “No one knew this was happening, and I doubt anyone would have guessed. America’s green energy revolution is here, and it starts in Illinois.” The group partnered with Environmental Law & Policy Center, LEAN Energy US, Illinois Solar Energy Association, Illinois Sierra Club, and George Washington University Solar Institute to produce a study on the state’s community choice power aggregation (CCA) program. The report says that the amount of renewable energy the state is using has reduced greenhouse gas emissions by an amount that would be equal to taking more than 1 million cars off the road or 250,000 homes off the electrical grid. 

“Renewable energy benefits everyone, from energy customers to Illinois farmers to anyone who breathes our air,” Gov. Pat Quinn said in a prepared statement. “This new study confirms that people around the world can look to Illinois as an example of what can be done with renewable energy.”

Local voters have to sign off on their government’s participation in community choice aggregation. This question appears before voters on the ballot: “Shall the City (or County) of ___________ have the authority to arrange for the supply of electricity for its residential and small commercial retail customers who have not opted out of such a program?” So far, the voters of more than 600 local governments have approved the move. Residents who do not wish to participate can opt out even if voters in their area choose community aggregation. 

Illinois was not the first state to allow community choice aggregation. In fact, of the six states that allow it, Illinois most recently adopted the policy. But Illinois communities also embraced it, and the option to buy renewable energy, more widely than those in any other state. For example, Ohio, which enacted the policy in 1999, has two cities that have gone completely renewable — Cincinnati and Cleveland. Cincinnati was the first major U.S. city to transition to using 100 percent renewable energy.

Besides the local governments in Illinois that are buying all renewable energy and renewable credits, several have gone 50 percent renewable. Some others are offering residents an opt-in renewable program that costs slightly more. “This report shows the strong public demand for renewable energy across Illinois, and the potential for solar energy and wind power to drive sustainable development in communities from Carbondale to Evanston,” Howard Learner, executive director of the Environmental Law & Policy Center, said in a prepared statement. 

While only a few states allow community choice aggregation, more are weighing the option. Colorado, Minnesota, New York and Utah are all considering such programs. 

The Chicago suburb of Oak Park was the first city in Illinois to make the change to 100 percent renewable, and Cincinnati leaders looked to the village. “While Cincinnati was the first major city to use aggregation to deliver a 100 percent green energy product, we were not the first to come up with the idea,” says Larry Falkin, director of Cincinnati’s Office of Environment & Sustainability. “We modeled our program on Oak Park’s.”

Only 5 percent of Chicago’s energy comes from wind farms, but that is double the amount that did before the city struck out on its own to buy power. The city’s aggregation plan, which includes the increase in wind power, a shift to natural gas and a reduction in energy use, cut greenhouse emissions by the equivalent of taking 100,000 cars off the road. According to the report, Chicago reduced its carbon emissions by 550,000 metric tons, its sulfur dioxide emission by 5,500 metric tons and its nitrous oxide emissions by 2,100 metric tons. “Through the success of the municipal aggregation program, the city of Chicago has decreased its carbon footprint while delivering savings to residents and small businesses,” Mayor Rahm Emanuel said in a news release. “By supporting Illinois wind farms and eliminating coal from the city’s portfolio, Chicagoans will build a cleaner, healthier environment for our children.” 

While Chicago buys its energy directly from wind farms, many of the local governments that have gone 100 percent renewable have done it through Renewable Energy Credits (RECs), which are basically a way for electricity consumers to buy the environmental benefits of renewables, regardless of what electricity they actually use. The U.S. Environmental Protection Agency describes them as follows: “As renewable generators produce electricity, they create one REC for every 1000 kilowatt-hours (or 1 megawatt-hour) of electricity placed on the grid. If the physical electricity and the associated RECs are sold to separate buyers, the electricity is no longer considered ‘renewable’ or ‘green.’ The REC product is what conveys the attributes and benefits of the renewable electricity, not the electricity itself.”

The environmental groups’ report notes: “While purchasing RECs does represent a procurement of renewable energy, it does not necessarily mean that local renewable energy projects were built as a result of the purchase.” However, the power and the benefits that come along with it were created somewhere along the way. The report encourages local governments to use their bonding authority to invest in green energy products. “As municipalities in Illinois and other states gain experience with CCAs, we urge them to move beyond Renewable Energy Credits and find ways to procure and develop locally sourced renewable energy in order to retain a much greater share of the benefits within the local community.”

Growth in the wind sector is already underway. According to the U.S. Energy Information Administration, Illinois is fifth in the nation for generating electricity from wind. The state created more than 7 million megawatt-hours from wind in 2012. The Center for Renewable Energy at Illinois State University found that the state’s largest 23 wind farms support 814 jobs in rural Illinois. 

But as is generally the case in the energy market, one producer’s gain is another’s loss. Exelon’s six nuclear plants in the state have failed to gain a profit over the past five years, and the company says it will announce plant closings by the end of the year if things don’t pick up. A recent analysis from the Chicago Tribune predicted that the company’s plant in Clinton is most vulnerable to closure because it is performing the worst financially. The market in which Clinton sells its power is also flush with wind energy. 

Exelon did not disagree with the Tribune’s findings. “Despite our best-ever year in generation, some of our nuclear units are unprofitable at this point in the current environment, due to the low prices and the bad energy policy that we’re living with,” Chief Executive Chris Crane told the Tribune. “A better tax policy and energy policy would be the clear answer, but if we do not see a path to sustainable profits, we will be obligated to shut units down to avoid the long-term losses.” The plant has 650 employees and is the biggest employer and largest taxpayer in DeWitt County. Exelon officials cite cheap natural gas prices as their biggest problem, but they say the growing wind market is also making it difficult to keep their power profitable. They take issue with the federal subsidies that wind power receives. In the face of similar conditions, Dominion closed its plant in Kewaunee, Wis., last year. 

“Natural gas prices are impacting nuclear assets, there’s no doubt about that. We would be able to survive that problem and survive low demand for electricity absent this phenomenon of subsidized wind,” says Joe Dominguez, Exelon senior vice president of government and regulatory affairs and public policy. However, wind is not the only energy producer that has received or currently receives subsidies. More traditional powered generator and delivery systems have built their infrastructure through increased fees to customers. Subsidies aside, wind turbines are also cheap to operate once they are up and running. 

Exelon has said it has representatives in “constant contact” with lawmakers but will not indicate whether they are seeking legislation. Crain’s Chicago Business reported that one potential idea is giving the plants credits, which would come with cash, for producing power that does not create greenhouse gas emissions. However, Exelon denies proposing any concept that would change the current energy market. At this point, it is unclear what will happen to the Exelon plants. However, many in the country, including President Barack Obama, say they believe that nuclear power should play a solid role in helping the nation transition from fossil fuels.

 

Local governments using Community Choice Aggregation to reach 100 percent renewable electricity:

Alton, Arlington Heights, Aurora, Bartonville, Beecher, Bethalto, Bolingbrook, Braidwood, Brimfield, Buffalo Grove, Carbondale, Cary, Champaign County, Channahon, Charleston, Coal City, Columbia, Crete, Creve Coeur, Decatur, Dunlap, East Peoria, Easton, Edwardsville, Elwood, Evanston, Forest City, Frankfort, Glen Carbon, Glendale Heights, Godfrey, Granite City, Hanna City, Henry, Homer Glen, Hopewell, Jacksonville, Kenilworth, Kilbourne, Lake Forest, Lemont, Lisle, Mackinaw, Manito, Marion, Marquette Heights, Marshall County, Mason County, McLean, Monticello, Morton, Normal, Norridge, North, Pekin, Oak Park, Paris, Park Forest, Pekin, Peoria, Peoria County, Peoria Heights, Peotone, Plainfield, Riverside, Roanoke, Rockdale, Rolling Meadows, Romeoville, Roxana, San Jose, Shorewood, South Barrington, South Pekin, South Roxana, Sparland, Stanford , Stark County, Tazewell County, Toluca, Topeka, Urbana, Warrenville, Washington, West Frankfort, Westmont, Woodridge

Illinois Issues, April 2014