State official: renewable investments ‘best thing’ to lower energy costs

SPRINGFIELD — With an increasing number of officials warning Illinois might struggle to meet its renewable energy goals, regulators and lawmakers met Tuesday to discuss how the state should regulate its energy industry.

The state is facing a potential decrease in electricity generation at the same time demand is increasing, partially because of data centers’ high demand for energy. Lawmakers are likely to discuss several proposals to address these issues this spring, including new energy efficiency programs in downstate Illinois and incentives for energy storage technology.

On Tuesday, Illinois Commerce Commission Executive Director Jonathan Feipel lent credence to some concerns around energy generation. The ICC regulates electric and natural gas utilities and is one of the major entities enforcing the state’s renewable energy goals.

“If we all sat and did nothing, we would have a significant problem when we get to 2030,” Feipel told lawmakers.

But Feipel, who said he was “bullish” on the issue, noted that the state will be able to meet its clean energy targets if it quickly develops additional sources of renewable energy, expands energy efficiency programs and rolls out new ways of pricing electricity.

“We have to think really thoughtfully around how we bring all those tools to bear,” Feipel said.

This lines up with the goals that Rep. Carol Ammons — the Urbana Democrat who took over as chair of the House Energy and Environment Committee earlier this year — said she has for the body.

In an interview after Tuesday’s committee hearing, Ammons said she hopes the committee will build on the state’s current energy and climate laws: the 2021 Climate and Equitable Jobs Act and the 2016 Future Energy Jobs Act.

Those laws laid out timelines for transitioning the state to only relying on clean energy and shutting down the state’s fossil fuel power plants. Under current law, all electricity in the state will come from renewable sources and nuclear power by 2050. CEJA and FEJA also laid out funding mechanisms for renewable energy, including state-funded incentive programs and charges on consumer utility bills to cover costs for new renewable developments.

“Balancing the things that are working with CEJA and tweaking where they are not,” Ammons said of her goals. “Or where FEJA may have not covered something, we’ll look to try to tweak that.”

Ammons also noted that she hopes the committee puts a renewed emphasis on diverse workforce development “to help us get to a clean energy economy.”

But the focus on renewable energy development raised concerns for some Republicans on the committee. Rep. Dave Severin, R-Benton — the ranking Republican on the committee — emphasized his position at the beginning of the group’s first meeting of the year.

“I like coal,” Severin said, speaking at the beginning of the committee’s first meeting this year.

Committee member Rep. Brad Halbrook, R-Shelbyville, said in an interview Tuesday evening that CEJA opponents had warned of rising prices when the law passed nearly four years ago.

“Republicans talked about what would happen if CEJA was enacted — that energy costs would go up, we would have less reliable sources of energy, it would drive jobs out of the state and it would provide that less clean energy would be imported into the state,” he said. “All those things have happened.”

The price of electricity in northern Illinois spiked to the highest point in the last decade over the summer of 2024, according to data from the Bureau of Labor Statistics. Prices have also generally risen in Illinois and many parts of the country since being relatively low in 2020 and 2021.

“The best thing that we can possibly do is to make sure we’re making investments in generation in Illinois because that will ultimately put downward pressure on prices,” Illinois Power Agency director Brian Granahan told lawmakers.

Proposals on the table

Lawmakers are likely to consider several policies during this legislative session — which ends in May — to address some of the issues facing Illinois’ energy sector.

In January, during a “lame duck” session before the inauguration of current lawmakers, the General Assembly passed a bill that requires a study of energy storage. Proponents of that technology say it could be a way to ensure that electricity from wind and solar plants deliver power at times of high demand.

Feipel said battery storage was “infamously” left out of CEJA, but that it is likely going to be addressed soon.

“You’ll see proposals on battery storage coming through the General Assembly — probably this session,” Feipel said.

Lawmakers are also likely to take up “energy efficiency” legislation to put the same requirements on Ameren — the electric utility that serves most of downstate Illinois — as are on Commonwealth Edison, the utility serving northern Illinois.

“In lame duck, we were very close on an agreement on energy efficiency — putting Ameren on parity with ComEd,” Illinois Environmental Council executive director Jen Walling told Capitol News Illinois last week.

A proposal like that is likely to be considered at some point this spring, something that Feipel indicated could benefit consumers. He said that, as a general rule, “every dollar you spend on energy efficiency programs actually saves customers two to three dollars.”

“It’s a perfect place to look to expand,” Feipel later added.

Data centers

One of the major issues facing Illinois is growing electricity demand from data centers — large facilities that run computers for artificial intelligence companies, stock exchanges and other high-tech enterprises. Those demands, according to Feipel, “came out of nowhere” and that it was a “critically important” issue.

“This is a real challenge that I think we’re facing,” Feipel said. “And I don’t think it’s insurmountable.”

Consumer advocates worry that data centers could force higher energy prices for residential customers.

A new report, released last month and conducted by a coalition of environmental and consumer groups, examined the connection between the data centers and consumer costs and the transition toward renewable energies in the United States.

“We believe there is great promise in AI generally, but it is important to distinguish between that and the specific generative AI platforms and their insatiable computing needs,” said Abe Scarr, the Energy and Utilities Program Director at PIRG and a coauthor of that report, in an interview with Capitol News Illinois. “We have seen the DeepSeek technology from China, which can do the same things with much less computing power.”

According to data from the Electric Power Research Institute quoted in the report, in 2023, Illinois was among the top 15 states for estimated percentage of data center electricity use. It accounted for about 5.5% of the total electricity consumed in the state — a number researchers believe is destined to grow due to new data centers opening in Illinois.

Another issue addressed in the report is the subsidization of data centers, which, according to the report, “benefit some of the most profitable companies in the world while creating major costs and electrical grid strain for communities.”

Tax breaks for data centers have ballooned under Gov. JB Pritzker. The state approved $468 million worth of tax credits to data centers between mid-2019, when the state’s data center tax credit first took effect, and mid-2023. The annual cost for data center tax incentives was $370 million by 2024, according to the report.

“We should think twice about promoting those developments here,” said Scarr. “Tax credits should end right away. We should slow down instead of incentivizing further.”

Capitol News Illinois is a nonprofit, nonpartisan news service that distributes state government coverage to hundreds of news outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.