Illinois Considers Measures to Encourage New Electric Transmission

Last week, we wrote about the draft Plan, which is required by the law commonly known as the Energy Transition Act, or the Climate and Equitable Jobs Act (CEJA). In that post, we explained the ongoing comment process and the draft Plan’s efforts to identify Renewable Energy Zones where development of renewable generation should be encouraged. This week, we’ll highlight how the draft Plan seeks to promote investment in those zones.

The draft Plan focuses on transmission infrastructure as the key driver for encouraging renewable development, and notes that there is some capacity available in the state’s existing transmission system and from planned projects. The ICC’s staff has asked that each of the regional transmission organizations (RTO) operating in the state – PJM and MISO – analyze existing transmission capacity in Illinois to inform the final Plan. The draft Plan predicts, however, that meeting the state’s clean energy goals will likely require new transmission to be developed.

The draft Plan acknowledges that the transmission system is planned and managed by a combination of entities, including the ICC, utilities, and RTOs. Therefore, accomplishing the Plan’s goals, the draft Plan acknowledges, will require the ICC to influence RTO rules and procedures via participation in committees and stakeholder groups, submitting comments in Federal Energy Regulatory Commission dockets, and via other formal and informal communications.

The draft Plan evaluates a number of potential RTO reforms that the ICC may pursue to help advance CEJA’s goals. Broadly, the draft Plan advocates that RTOs employ “proactive” transmission planning, instead of an approach that responds to individual generator interconnection requests. While the draft Plan credits MISO’s existing regional transmission planning, it notes that more frequent review of required upgrades may be required. Additionally, the draft Plan notes that improvements in interregional planning along the PJM-MISO seam in Illinois may be required in order to improve grid access for Renewable Energy Zones. Further, the draft Plan explores potential changes to non-transmission elements of RTO rules and procedures, including greenhouse gas emissions accounting, capacity market reforms, and new ancillary service products.

The draft Plan explains, however, that existing avenues for expanding transmission capacity for renewables must be explored until new RTO policies can be implemented. For example, according to the draft Plan, PJM allows for a “State Agreement Approach” in which a state may lead the evaluation and selection of specific transmission projects if it assumes responsibility for the cost of those projects, but New Jersey, the draft Plan notes, is currently using the State Agreement Approach to develop transmission for offshore wind generators. The draft Plan adds that the potential benefits and drawbacks of pursuing the State Agreement Approach in Illinois will be evaluated in the final Plan.

ICC staff is accepting comments on the draft Plan until November 9, 2022. Stay tuned to this blog for further updates on the Plan and contact a member of the firm’s Energy and Cleantech team to learn more.