Illinois state legislators have passed new renewable energy-focused legislation that will give the Illinois Power Agency (IPA) more autonomy on its annual renewable energy solicitations and set up a study of energy storage technology to further the state’s investigation of an energy storage incentive and procurement program.

The legislation in question, HB 587, was approved by the House last week with the Senate voting to approve its version the next day.

The move to further study storage is something of a stopgap from what was originally considered for the bill: an incentive and funding structure for the technology that would have put the IPA in charge of managing solicitations for the state’s public utilities in a similar fashion to what it does now through annual renewable procurements.

However, IPA Director Brian Granahan disagreed with the notion that the legislation is putting a pause on the concept, noting the IPA has never had authorization to source storage and the new legislation does not change that. He also argues HB 587 will “address key issues for stakeholder discussion that would need to be resolved in advance of an energy storage procurement event,” even if it contained such authorization outright.

While the IPA will indeed be in charge of managing storage solicitations if any storage mandate is enacted, for now, the storage study will be headed up by the Illinois Commerce Commission (ICC). The state’s regulatory body will host a series of workshops throughout the first half of the year, which Granahan says are set to conclude no later than May 1, 2025.

Despite this pause on setting up an energy storage incentive structure in the state, there is evidence to suggest that a storage procurement event may very well occur in the state before the end of the year.

Illinois state senator Bill Cunningham, an advocate for energy storage, said publicly the intent is for the legislature to reconvene on the issue in the Spring prior to the end of the legislative session in May. Granahan notes the potential for the IPA to host a storage procurement event is also essentially written into the bill through the phrasing that the IPA “shall be positioned to have developed a confidential benchmark and solicited, received and opened sealed bids for such initial procurement to conclude no later than Aug. 26, 2025.”

“We feel that the workshop process authorized through HB 587 places us on a trajectory to conduct an energy storage procurement event in 2025, even if express statutory authorization through a second bill this spring remains a necessary predicate step,” Granahan said.

Renewable Procurements

In addition to setting the stage for a potential storage incentive and procurement structure, the new legislation also provides the IPA authority to propose adjustments to its current targets for its renewable energy solicitations when necessary “based on developer interest, market conditions, budget considerations and resource adequacy needs.”

Presently, the split is mandated to be made up of 45 percent wind or hydropower and 55 percent solar. However, the IPA has consistently struggled to procure the wind capacity necessary to fill that side of its procurement target, resulting in solicitations that have leaned heavily on the solar side. For now, Granahan says the IPA remains uncertain whether it would utilize this authority and seek an adjustment to the targets.

“It’s simply to early to tell,” Granahan said. “We’d most likely be analyzing market conditions and procurement event results later this summer before making a proposal.”

Granahan notes no adjustments to its target percentages are possible for this year anyway as they would need to be included in the IPA’s next long-term renewable resources procurement plan. At this time, he says such a plan is expected to be filed in October 2025, which he says would put it on a timeline for approval from the ICC around February 2026.

While Granahan says a detailed procurement schedule for 2025 has not yet been published, the agency is expected to conduct two procurements in 2025 with one slated for the summer and the other in the fall. The amount of capacity selected through the procurement events varies, but over the last two years the IPA has selected between 500 and 1,200 MW from each procurement.

Notably, a third piece of the new legislation provides a guarantee that projects approved under the state RPS and selected by the IPA through its solicitation program would be funded through utility customer charges in the case of unexpected price spikes or budget shortfalls. This provision is in response to reporting that the IPA could face a USD 3.1bn budget shortfall by 2039 based on figures included in its most recent long-term renewable procurement plan.

While Cunningham admits that “RPS buffet modeling” is demonstrating a shortfall may occur in the future, he clarifies the IPA does not face such a shortfall at the present time and that the agency would “suspend procurements” before a deficiency took hold. However, he says it is accurate that the IPA “would potentially be required to curtail additional renewable energy credit procurements in future years if RPS buffet modeling continues to demonstrate that a shortfall would occur.”

*This story was originally published exclusively for NPM subscribers.

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