Illinois Passes the Climate and Equitable Jobs Act (SB 2408)

Illinois capitol building

After nearly three years of policy development and a year of debate and negotiation, the Illinois General Assembly passed the Climate and Equitable Jobs Act (SB 2408) and Governor Pritzker signed it into law on September 15. This nearly 1,000-page bill sets Illinois on a pathway toward power sector decarbonization by 2045, creates equitable clean energy workforce development pathways and expands state commitments to energy efficiency, renewable energy and electric vehicles. Implementation will require coordination amongst several state agencies, the Illinois Commerce Commission, utilities and the entire statewide energy sector – businesses, experts and advocates.  

This legislation will usher in a new era of Illinois utility regulation, programming and power sector replacement moving Illinois toward broad decarbonization and equitable clean energy workforce development. Energy efficiency is essential to mitigate cost increases to ratepayers and to increase reliability and resiliency throughout the overhaul of Illinois’ energy system. Implementation and coordination across our industry will be essential if we are to meet the aggressive targets and important requirements within this legislation. MEEA is ready to contribute our policy and program expertise to ensure energy efficiency investment is maximized and support the goals to build a stronger, more diverse and equitable clean energy workforce ensuring communities across the state will thrive.  

Highlights of the Bill 

Energy Efficiency 

(pages 585-655) 

The energy efficiency changes could easily get lost, given the sweeping revisions to Illinois’ power sector regulatory framework. However, they will have profound implications for electric energy efficiency portfolio planning going forward. The bill extends the electric cumulative persisting annual savings targets beyond 2030 (page 588-600) and adds a "clear and convincing" evidence standard to justify any portfolio plan with energy savings below the statutory requirements (pages 624-628). Other significant changes are described in more detail below. 

Opt-out (pages 651-655) 

The bill replaces the 10MW customer exemption from EE charges and programming with an opt-out provision available for eligible large private energy customers. An opt-out provision means that all customers previously exempt under the Future Energy Jobs Act (2016) are automatically back in unless they avail themselves of this opt-out, subject to eligibility and then provide prescribed notice. This opt-out provision brings public facilities back into utility programs and allows eligible large private customers the ability to participate once again.  

The key elements of the opt-out provision: 

  • Federal, state, municipal and other public customers are not eligible to opt-out 

  • The opt-out request is only valid for the requested plan cycle. A new opt-out request must be made for each subsequent plan cycle.  

  • A business entity with multiple locations can have all locations considered eligible for opt-out as long as the business entity owns one customer account qualifying at 10MW peak demand.  

  • As part of notice, eligible customers must provide an audit report identifying cost-effective energy efficiency project opportunities they could invest in over the following 10-year period along with a description of their plans to reallocate internal funds to complete energy efficiency projects 

  • A utility’s cumulative persisting annual savings targets will exclude opt-out load 

Low-Income and Health/Safety (pages 603-609) 

The bill bolsters existing EE program requirements, reorganizes and funds the low-income energy efficiency accountability committee (formerly the north and south income qualified committees), and requires electric utilities to invest in pre-EE health and safety measures.  

  • Minimum spending for low-income programming: 

  • Ameren raised from $8.35 million to $13 million 

  • ComEd raised from $25 million to $40 million 

  • Requires proportionality on spending for single-family and multi-family compared to magnitude of energy savings potential 

  • Requires 80% of electric utilities’ total low-income EE budgets be dedicated to whole-building weatherization programs 

  • Requires electric utilities to implement a health and safety fund of at least 15% of the total low-income weatherization budget 

  • Requires bundling of low-income programs with other programs that serve low-income households 

  • The Illinois Commerce Commission is directed to oversee the low-income energy efficiency accountability committee with a budget of 0.25% of each utility’s entire annual efficiency portfolio funding 

Electrification (pages 600-602) 

The bill enables electric utilities to incorporate electrification (fuel switching) programs into the energy efficiency portfolio plans. Beginning in 2022, Ameren and ComEd “may offer and promote measures that electrify space heating, water heating, cooling, drying, cooking, industrial processes, and other building and industrial end uses that would otherwise be served by combustion of fossil fuel at the premises, provided that the electrification measures reduce total energy consumption at the premises.” Electrification-derived savings can be counted toward cumulative persisting annual savings targets, subject to the following caps: 

  • 5% per year 2022-2025 

  • 10% per year 2026-2029 

  • 15% per year 2030 and beyond 

This language provides utilities and stakeholders guidance on fuel conversion as a method of reducing total energy consumption at a particular premises and we can expect additional discussion of implementation details in the Stakeholder Advisory Group’s Fuel Conversion Working Group.    

Building Energy Stretch Code (pages 244-248; 630)  

The bill directs the Illinois Capital Development Board to create a residential and commercial stretch energy code to be available for adoption by individual municipalities. The stretch code must adhere to specific site energy index performance targets outlined in the legislation. The goal is to enable municipalities to surpass the statewide building energy code to achieve greater energy efficiency at the time of building construction. The bill also includes a provision allowing electric utilities to engage in compliance-related education and programming that can count toward their energy savings goals.  

Next Steps 

On Tuesday, October 5 at 3:00 p.m. CDT, MEEA will host a member briefing to walk through the provisions of this bill in more detail, discuss implementation priorities and timelines and discuss resources that MEEA should develop.  

There are a number of outstanding energy efficiency-related questions about this legislation, including implementation/effectiveness dates, whether utilities will refile/amend approved 2022-2025 EE plans, opt-out notice requirements, etc. MEEA staff will continue to participate in SAG working groups and support the Illinois Commerce Commission and other state agencies’ implementation, any changes to plan filings and key deadlines. If you have any questions about the legislation and how it may impact Illinois’ energy efficiency landscape, please reach out to Policy Director Nick Dreher