September 23, 2021

Nikhil Vijaykar

Illinois’ landmark energy law includes the nation’s most comprehensive grid planning requirements

Good planning will ensure that grid infrastructure supports the state's clean energy ambitions, to the benefit of all Illinoisans

Illinois enacted landmark energy legislation last week. Calling the nearly thousand-page Climate and Equitable Jobs Act (SB 2408) “ambitious” would be like calling Chicago’s winters “brisk.” Among just the headlines: CEJA commits Illinois to a 100% carbon-free power sector by 2045; invests billions of dollars in renewable energy; expands energy efficiency programs; deploys clean energy workforce training hubs in disadvantaged communities across the state; and ramps up incentives for electric vehicles and charging stations. The bill is, in a word, sweeping.

Clean Energy Needs Clean Government

CEJA establishes the nation’s most comprehensive, detailed, and inclusive distribution grid planning requirements.

“Electric utility accountability” didn’t make it into the title of the legislation, but it’s hard to miss that underlying theme throughout the Act (after all—Commonwealth Edison’s bribery scandal provided the ugly backdrop to legislative negotiations). CEJA recognizes that unless utilities—the stewards of the power system—are held accountable, Illinois will fall short of both its climate and equity goals. So, the Act tightens utility ethics requirements, directs an audit of utility spending over the last decade, and replaces the opaque “formula ratemaking” framework that favored utilities with “performance-based” rates. Most importantly, CEJA establishes the nation’s most comprehensive, detailed, and inclusive distribution grid planning requirements.

Why does good grid planning matter?

Stakeholder-informed, comprehensive, detailed, and inclusive planning will ensure that Illinois’ grid infrastructure supports its clean energy ambitions. A carbon-free power sector requires a grid that is flexible and decentralized, that shifts and shapes demand to integrate high levels of renewable energy at low cost, that is friendly to distributed energy resources like rooftop solar and electric vehicles, and that empowers individuals and communities to provide energy services to the whole system. In short, it requires a modern grid.

Today’s grid—built to carry electricity in one direction from large central power plants to homes and businesses—won’t meet the needs of a carbon-free power sector. Trying to erect the power system of the future on today’s grid would be like trying to build the Willis Tower on reclamation: shaky, at best. But Illinois’ fossilized utility-centric grid planning paradigm—which leaves little room for stakeholder input or regulator oversight—does not promise a modern grid.  That is why the Climate and Equitable Jobs Act will fundamentally transform the way that Illinois utilities plan their distribution grids.

How will CEJA make grid planning better?

CEJA requires utilities to file detailed, long-term “Multi-Year Integrated Grid Plans” with the Illinois Commerce Commission. It spells out the data that utilities must provide, and the analyses they must conduct, as a part of those plans. Utilities will now be required to:

• Disclose their historic and planned grid spending
• Report on grid performance by location
• Assess “hosting capacity” (how much rooftop solar capacity can be added to each circuit on the grid)
• Explain how their grid investments will benefit low-income and environmental justice communities
• Analyze whether distributed, customer-owned clean energy solutions like batteries, solar and energy efficiency could help meet distribution grid needs and avoid unnecessary utility spending

CEJA gives the Illinois Commerce Commission the authority to approve, deny or modify Grid Plans following a contested proceeding. To ensure that utilities are held to their commitments, CEJA requires utilities to demonstrate, in rate cases, that their proposed grid investments are consistent with their approved Grid Plans.

Importantly, in order to ensure that Grid Plans are responsive to the priorities of all Illinoisans, and not only to the interests of parties who have the resources to participate in a legal proceeding, CEJA launches a six-month-long statewide open workshop process prior to the filing of the first set of Grid Plans. The purpose of the workshop process is to shine a light on the utilities’ distribution planning process and gather input on the grid data and investments that Illinoisans would like to see in the filed Plans. The law erects guardrails that will make the workshop process effective: it will be facilitated by an independent third-party, it will solicit and consider input from diverse stakeholders including environmental justice communities, and it will culminate in a set of recommendations that the Commission must consider.

What’s Next: Effective Implementation

CEJA’s comprehensive grid planning requirements promise utility accountability, clean energy deployment, and equity. But the rubber will hit the road at the Illinois Commerce Commission over the next several years. Recognizing that implementation proceedings won’t be a light lift, the Act creates a new division at the Commission wholly dedicated to grid planning. That division will be established by January 1, 2022 and will be busy right away—the workshop process begins on the same date. Just over a year later, on January 20, 2023, the utilities will file their first Multi-year Integrated Grid Plans. Illinois’ march towards a modern grid that enables a climate-friendly, equitable power system, is underway. ELPC will be watching every step of the way.