Illinois RPS
Illinois Renewable Portfolio Standards Q&A
Updated September 2009
What are Renewable Portfolio Standards?
Many states require suppliers of electricity to source a certain percentage of the electricity they supply to customers from renewable sources (for example, wind, solar, biomass, etc). The required percentages of renewables are often set forth in legislation as Renewable Portfolio Standards, or RPS. State governments enact these renewable portfolio standards as a way to stimulate the development of new renewable generation resources, decrease the reliance on fossil fuels and limit greenhouse gas emissions—which are a by-product of electricity generated from conventional sources such as coal. The RPS also serve to stimulate technological development so that renewable generation may more rapidly become economically competitive with other forms of electric power generation. As of yet, there is not a federal renewable portfolio standard. To find out more about which states have RPS, click here.
When did Illinois enact RPS?
In August 2007, Illinois enacted legislation (Public Act 95-0481) which created an RPS standard. Originally, the RPS applied only to electricity sold under the bundled, fixed-price utility tariffs. However, Illinois recently amended its RPS to require compliance by alternative retail energy suppliers (ARES) such as Direct Energy (see Public Acts 95-1027, 96-0033 and 96-0159), As newly amended, all ARES must comply with the RPS starting June 1, 2009 for all contracts executed or extended after Mar. 15, 2009.
What are the requirements of the Illinois RPS?
The quantity of renewable energy resources that an ARES must procure is measured as a percentage of the actual amount of metered electricity (megawatt hours) delivered by that supplier to Illinois retail customers during the 12-month period June 1 through May 31. The annual percentages by delivered load are as follows:
- at least 4% of delivered load by June 1, 2009
- at least 5% of delivered load by June 1, 2010
- at least 6% of delivered load by June 1, 2011
- at least 7% of delivered load by June 1, 2012
- at least 8% of delivered load by June 1, 2013
- at least 9% of delivered load by June 1, 2014
- at least 10% of delivered load by June 1, 2015
- increases of at least 1.5% each year thereafter to at least 25% by June 1, 2025
Additionally, beginning on June 1, 2015, at least 6 percent of the renewable energy resources used to meet the standards must come from solar photovoltaic cells and panels.
Who is responsible for complying with the Illinois RPS?
Alternative Retail Electric Suppliers as well as investor-owned electric utilities are required to comply with the Illinois RPS requirements. In addition, from year-to-year the required percentage of renewables is the same for both ARES and the investor-owned electric utilities. Individual energy consumers do not need to be concerned with RPS compliance. Suppliers manage the procurement of the appropriate percentage of renewable energy mandated by the Illinois RPS to cover their entire delivered customer load within the state. The RPS requirements are imposed on the supplier of the electricity and will not affect the ability of a customer to choose an ARES.
Are there costs associated with RPS compliance and how are they recovered?
There are costs associated with RPS compliance. A retail electric supplier may choose to recover those costs with a separate $/kWh charge against monthly usage. Such a charge would likely appear as a “Renewable Energy” or “Renewable Portfolio Standards” line item on the bill, for example:
|
Renewable Portfolio Standards - 0 kWh Total @ $0.0/kWh $0.00 |
Alternatively, a retail electric supplier may decide to bundle the cost of RPS compliance into a fixed $/kWh price for power.
What sources of renewable energy count toward compliance?
For ARES, a minimum of 60 percent of the annual renewable energy procured to satisfy the RPS must come from wind power and the remaining amounts (40 percent) can come from other eligible renewables. These resources include solar thermal energy, photovoltaic cells and panels, biodiesel, crops and untreated and unadulterated organic waste biomass, tree waste, hydropower that does not involve new construction or significant expansion of hydropower dams, and other alternative sources of environmentally-preferable energy.
Resources:
http://www.epa.gov/chp/state-policy/renewable_fs.html
http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=IL04R&re=1&ee=0
