Illinois to Update Renewable Energy Credit Procurement Rules

Renewable energy developers have one final opportunity to comment on changes to the rules that govern the procurement of renewable energy credits in Illinois. In recent years, many states have adopted policies to increase use of renewable energy and to achieve ambitious targets for electricity generation from renewable resources (renewable portfolio standards). Whether developers of wind, solar, or other renewable energy resources benefit from these policies is often dictated by extensive state rules and procedures, which can complicate development.

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In Illinois, procurement rules are revised on a two-year cycle, via the Illinois Power Agency’s (IPA) Long-Term Renewable Resources Procurement Plan. On October 20, 2023, the IPA filed its latest version of the plan with the Illinois Commerce Commission, initiating a public proceeding to review and ultimately approve the plan. This proceeding will have important impacts on renewable energy developers in the Illinois market. Objections to the draft plan are due by November 3, 2023.

Renewable Energy Credit Procurement in Illinois

In 2021, as part of the Climate and Equitable Jobs Act (CEJA), Illinois increased its renewable portfolio targets to 40% by 2030 and 50% by 2040. To achieve those goals, the IPA operates procurements for renewable energy credits (RECs) from utility-scale renewables, community solar projects, and distributed energy resources, under the terms of the plan. In recent years, the plan has changed significantly, as the IPA implements new requirements and programs adopted as part of the sweeping CEJA legislation.

The 2024 Long-Term Renewable Resources Plan

For its 2024 plan, the IPA proposes several important categories of changes:

Expanded procurement eligibility criteria: Allowing newly modernized or retooled hydropower facilities to participate in REC procurement programs.
New REC contract flexibility: Efforts to reduce risk for utility-scale developers, including more flexible contract terms and future workshops to discuss contract renegotiation processes to address volatile market conditions.
Revised REC prices: Lower REC prices for both utility-scale Indexed REC and community solar RECs under the Illinois Shines/Adjustable Block Program.
Increased REC budget: A 20% increase in the Illinois Shines/Adjustable Block Program REC capacity, from 667 MW to 800 MW, with proportional increases in the Community Solar category.
MES updates: Continued refinements to the definitions and targets applicable to the Minimum Equity Standard (MES), which is a requirement designed to increase contracting and sub-contracting with Equity Eligible Persons (EEP).
EEP and EEC updates: More stringent certification and reporting requirements for EEP and Equity Eligible Contractors (EEC) who seek to participate in the IPA’s programs.

Developers Must Act Quickly

The timeline for finalizing the new plan is fast. Parties seeking to comment on the IPA’s draft plan may now do so via the Illinois Commerce Commission’s (ICC) public proceeding. Initial “objections” must be filed with the ICC by November 3, 2023. After receiving the comments, the IPA will determine whether further rounds of written comments and a public hearing are appropriate before it issues a final order regarding the plan. The IPA proposes that Responses to Objections be submitted by December 1, 2023, Replies by December 15, 2023, and a Proposed Order be issued by January 16, 2024. The ICC’s final order approving or modifying the plan must be issued by February 20, 2024.

Please contact a member of our Energy & Cleantech team if you would like to learn more about Illinois’ Long-Term Renewable Resources Procurement Plan or other renewable energy credit procurement programs.