This spring, Illinois lawmakers introduced a legislative package intended to bring more energy storage, renewable energy, and demand-side management resources onto Illinois’ grid. While the measure was on track to receive a vote before the General Assembly adjourned on May 31, legislative leaders deferred action on the bill. The legislation was the culmination of a multi-year effort from stakeholders to build on, and address gaps in, the successes of the state’s last major energy bill, the Climate and Equitable Jobs Act (CEJA).

Quite a bit has changed since CEJA passed in 2021. For starters, projections for electricity demand have sharply increased in recent years. Newer technologies such as large-scale battery storage have taken a strong hold in the market, and consumer adoption of rooftop solar, home battery storage and smart thermostats have scaled up quickly. Additionally, after several years of implementation of Illinois’ 100% clean goals, several policy tweaks were identified that will ensure the policy works efficiently and effectively to bring more wind and solar to the state.

To boot, forces outside state leaders’ control are mounting even more pressure on state policymakers to pass legislation. ComEd customers will likely experience steep increases in their utility bills due to the results of PJM’s 2025/26 capacity auction over the course of the next 12 months.

Advocacy groups and lawmakers continue to express urgency. That momentum persists, and there is still time to pass the energy package this fall or winter. If passed, Illinois — a state poised to see immense economic growth from new manufacturing, data centers, and quantum computing — will become one of the most appealing states for advanced energy investment. The measure would also ensure Illinois can re-assert itself on the path toward power sector decarbonization by mid-century.

What is proposed in the energy package?

The energy package would open new markets and create greater market certainty for developers of energy storage and renewable energy, while increasing electric utilities’ commitments to energy efficiency and other demand-side management measures. Key components include:  

• Energy Storage Procurement Targets: Creating a mandate deploying 3 GW of operational energy storage by 2030 (necessary to replace the ~3GW of fossil fuel generation scheduled to retire by 2030) and a minimum of 6 GW of operational energy storage by 2035; 

• Energy Storage Rebates: Establishing an innovative rebate for energy storage accessible to all customers tied to participation in an interim “Dispatch Virtual Power Plant Program” whereby recipients of the rebate are required to commit to discharging stored power during peak demand. In effect, this program deploys supply capacity on the distribution system, bypassing lengthy RTO interconnection queues; 

• Virtual Power Plants: Establishing a technology-neutral Virtual Power Plant Program as a comprehensive strategy to increase energy supply and reduce energy demand during peak hours; 

• Renewable Portfolio Standard (RPS) Reforms: Addressing challenges seen in the residential, community solar, and utility-scale RPS segments which are stymying deployment; 

• Interconnection Reforms and Load Energization Timelines: Requiring discipline from utilities in their interconnection practices for both new generation and new load, like charging stations; and 

• Thermal Energy Networks: Authorizing utility pilots, financed primarily by the Illinois Finance Authority, that positions utilities and third parties to develop networked geothermal systems.

What held up the bill’s passage before the end of Spring session?

Throughout session, lawmakers leading the negotiation process convened a broad set of stakeholders on a range of issues within the scope of the bill, resulting in House Amendment 2 to Senate Bill 40 filed on May 28. From there, the bill evolved rapidly in the final days of the legislative session as key decision-makers worked to bring stakeholder groups on board. House Amendments 6 and 7 to SB 40 were filed on May 31, representing a balance struck between representatives of industry, environmental advocates, consumer advocates, utilities, some labor unions, and government agencies. However, as the process unfolded, a confluence of factors worked against the bill.

Ultimately, the bill was bogged down by questions over costs, particularly amidst news that electricity bills are already set to rise due to factors outside of the legislature’s direct control. Moreover, while concerns with the bill’s policies were not insurmountable, the limited time proved to be another key concern, particularly as the legislature had an obligation to pass a balanced budget before adjourning.

In the end, despite the herculean effort which remarkably resulted in a broad set of stakeholders coalescing to agree on advancing the bill, lawmakers were sensitive to the need to get it right.

What’s next?

As the US Congress inches closer to phasing out tax credits for renewables and storage through its reconciliation bill, the cost impacts on Illinois customers could be compounded. Meanwhile, Illinois faces a resource adequacy shortfall which will continue to place upward pressure on bills unless the state deploys additional supply this decade.

Although the Illinois legislature was unable to take action this Spring, the train has not left the station. By passing the energy package during Fall Veto Session in October, state lawmakers have an opportunity to send a strong market signal to industries committed to facilitating investment and deployment of advanced energy technologies for lower costs, and more good paying jobs in the state.

It is critical for industry, alongside advocates and other proponents, to ensure lawmakers understand what they are voting for and how the cost of doing nothing dwarfs the costs for enabling investment to replace the older, more costly fleet of electricity generation. Advanced Energy United looks forward to the work ahead to tie the bow on what will be another historic clean energy bill that will serve as an example of state leadership on advanced energy policy in the face of heavy politicization of energy issues.