New legislation and renewable energy

January 25, 2012

By Drs. Robert & Sonia Vogl
President and Vice President, Illinois Renewable Energy Association

The legal landscape in Illinois includes new provisions that are seen by some as favorable for renewable energy. The state’s Renewable Portfolio Standard called for 25 percent of its energy coming from renewables by 2025. The law stimulated the substantial rise in wind farms, but was far less effective stimulating other forms of renewable energy.

A 1 percent carve-out provision for Distributed Generation (DG) was added to the state standard. The provision is expected to stimulate individuals and businesses to generate electricity on their sites, sell it back to the utility, and earn renewable energy credits that can be sold to buyers. The most likely choice for rooftops is solar energy.

Net metering provisions have been added that should expand the market for distributed generation as well. The net metering cap has been raised from 1 percent to 5 percent, which is expected to stimulate installations of DG systems. Customers enrolled in real-time pricing programs are now eligible to participate in the net metering program.

A 10-year project through which smart meters will be provided for ComEd customers and the majority of Ameren Services customers has also been added.

Legal provisions allowing for municipal aggregation has, for the moment, stimulated widespread interest in the state. Government officials are legally prevented from openly advocating for the passage of a referendum, but can supply information describing it. By passing a referendum, voters authorize officials to aggregate their collective consumption and shop for a third-party supplier. If officials do not find a lower-cost package for the community than current cost of service from ComEd or Ameren, the bid would be rejected.

More than 100 local governments in Illinois are considering municipal aggregation; some have already implemented such programs. The upcoming March ballot is when most constituents will be asked to decide whether they want their community to be involved in the program. If a referendum passes, officials will have to consider proposals from various third-party providers. The Citizens Utility Board has a page on their website describing the various choices.

The appeal of community aggregation is that customers in the aggregation will pay less for their electrical consumption. Savings ranging from 9 percent to 25 percent have been cited as possible. Some state officials and spokespeople for the Citizens Utility Board have cautioned that the savings are not guaranteed.

For us, the former system of net metering was very straightforward. Any size system could use net metering, sending excess electrical production back to a participating utility and be paid at the same rate as charged for electrical service. The new legislation raises the level of eligibility to a 2 MW system.

A news item in the January issue of Photon describes the new legislation as “As a step backward in the Land of Lincoln.” Madeleine Weil with the Environmental Law and Policy Center (ELPC) in Chicago points to language in the legislation that indicates that only customers assigned to a noncompetitive class can use net metering. What is feared is that most residential and non-residential customer classes are likely to eventually fall under the umbrella of a noncompetitive class. A customer class becomes competitive when a third of all rate payers sign up to receive their electricity from an alternative retail electrical supplier.

With the growing popularity of community aggregation across the state, customers could themselves be in the noncompetitive class and no longer eligible for net metering. The ELPC will try to change this situation.

Drs. Robert and Sonia Vogl are founders and officers of the Illinois Renewable Energy Association (IREA) and coordinate the annual Renewable Energy and Sustainable Lifestyle Fair. E-mail sonia@essex1.com.

From the Jan. 25-31, 2012, issue

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