Governor's sustainable energy plan for Illinois

StoryImage( ‘/Images/Story//Auto-img-111220585816455.jpg’, ”, ‘WIND FARMS IN ILLINOIS: Black square = Existing wind project 10+ MW; Circle = Proposed wind project 10+ MW’);

As part of his State of the State Report in February, Gov. Rod Blagojevich submitted a proposal for an Illinois Sustainable Energy Plan to the Illinois Commerce Commission. In it he called for greater use of renewable energy and energy efficiency to create jobs, boost investment in rural communities, protect the environment, promote energy independence and help stabilize energy prices.

A proposed Renewable Portfolio Standard would require utilities and other suppliers to provide 2 percent renewable energy to Illinois customers by 2006, increasing 1 percent annually until it reaches 8 percent by 2012. The plan would result in nearly 4,000 megawatts of power being produced to power nearly 1 million Illinois households. Seventy-five percent of that power, or 3,000 megawatts, would be wind generated.

More than a dozen areas in Illinois are being considered for wind farms. According to the Environmental Law and Policy Center, developers have already proposed 1,700 megawatts of power representing an investment of $1.5 billion. Boone, Carroll, Lee, Ogle, Stevenson and Winnebago counties have wind farm proposals. If all of them are built, the total capacity would range from 868 megawatts to 1,108-megawatts and represent an investment of $765 million to $975 million (See accompanying map and table).

The 1108 megawatt wind capacity is comparable in size to one Byron nuclear power unit. While rated capacities are similar, wind power is variable, and nuclear plants operate continuously for extended periods of time.

The economic viability of wind farms is highly dependent on federal production tax credits worth $.018 per kilowatt. They can only be used to reduce federal tax liabilities so developers of wind farms must include economic interests who can make use of them. In some cases, tax credits account for up to half the economics of a wind farm project.

Tax credits have been granted on an annual basis, which causes considerable uncertainty for investors. Uncertainty in 2004 slowed down wind farm installations substantially. With the tax credit renewed through December of this year, installations will increase dramatically.

The industry would prefer that tax credits were extended over several years so developments could occur in a more orderly fashion. Uncertainties have contributed to a situation where about 90 percent of the wind turbine market is supplied by foreign companies.

The GovernorÂ’s plan also calls for an Energy Efficiency Portfolio Standard that would require a greater investment by electric utilities in programs that save energy. Upgrading heating and cooling systems and installing energy-efficient lighting and appliances will save energy and lower energy bills for Illinois families and businesses.

On March 16, an initial planning meeting sponsored by the Illinois Commerce Commission was held in Chicago to introduce the plans and set up working groups to comment on them. Two working groups were established: one to address the Renewable Portfolio Standard and a second to address the Demand Response and Energy Efficiency Programs. Working groups will be meeting in April in Chicago, and a report will be submitted to the Commission May 18th.

From the March 30-April 5, 2005 issue

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