Exclusion of muni and co-op customers will mean more disillusionment and frustration for communities who have long felt alienated and abandoned by the state government and industry. – Pam Richart, Eco-Justice Collaborative
Judge: Municipal, co-op customers ineligible
for Illinois solar incentives
ComEd, the state’s largest utility, argued that its customerswould be
subsidizing municipal and co-op customers if they were allowed to receive solar incentives.
Opus Photografix / Creative Commons
Thousands of customers of electric cooperatives and municipal utilities in downstate Illinois will not be able to take advantage of new incentives for distributed and community solar if the Illinois Commerce Commission upholds a proposed order by an administrative law judge.
The Future Energy Jobs Act (FEJA), passed in late 2016, is meant to create about 1,300 MW of new distributed and community solar in Illinois through Solar Renewable Energy Credits (SRECs) that can be sold by the owners of the installations to offset costs.
But the judge’s recommendation on Feb. 26 would prohibit customers of municipally-owned utilities and electric cooperatives from selling SRECs or benefitting from adjustable block grants meant to spur the creation of new solar. Only customers of utilities ComEd and Ameren would be eligible under the proposed order.
Now, solar developers say, projects already in the pipeline will likely be canceled and fewer solar installation and marketing jobs will be created.
“I’m very, very disappointed. It’s like I had the rug pulled out from under me,” said Ron Cloninger, a Canton, Illinois, resident who had signed a contract for a 9.86 kw solar installation, thinking the FEJA incentives would cover about 40 percent of the $28,000 cost.
He learned about the incentives from solar developers and advocates at a farm show in Peoria last fall and was excited to immediately move forward with solar. Now he expects he’ll cancel the project. The incentives “made it feasible for us to do it. We were really counting on it,” said Cloninger, a customer of the Spoon River Electric Cooperative. “Otherwise I wouldn’t have even looked at it.”
The law calls for prioritizing solar development and the creation of solar-related jobs in low-income, minority and rural areas. Developers say the exclusion of muni and cooperative customers will make solar inaccessible for many in economically struggling areas.
“Those rural communities are some of the poorest in the state,” said Illinois Solar Energy Association executive director Lesley McCain.
In central and southern Illinois, almost 1-in-4 electric customers are served by munis and co-ops, according to McCain. She said that since June 2017 when eligibility for FEJA incentives began, 87 solar projects have been built in those areas, likely driven specifically by the expected incentives. And 222 solar projects were planned in those areas that now might be canceled, she said.
An unpleasant surprise
Judge Leslie Haynes will issue a final order later this month, and then the commerce commission will decide whether to adopt it. A public comment session is scheduled for March 21.
ComEd, the utility that serves northern Illinois, had argued that muni and co-op customers should not be able to participate in the incentives since munis and cooperatives are not required to comply with the state’s Renewable Portfolio Standard (RPS), and their customers do not pay into a fund to procure renewable energy. ComEd argued that allowing muni and co-op customers to get incentives related to the RPS would mean that ComEd customers who paid into the RPS fund were essentially subsidizing the muni and co-op customers who didn’t pay.
But solar developers and advocates had until recently believed that muni and co-op customers would be able to sell SRECs to the utilities to help the utilities meet their RPS obligations. And, they say, many muni and co-op customers have already installed or began the process of acquiring solar with the expectation that FEJA would make it more financially viable.
“Up until now, co-ops and munis could participate in any of the incentive programs” offered for solar in Illinois, including rebates and past supplemental procurements of RECs meant to meet the state RPS, said McCain.
The Environmental Law & Policy Center argued in a brief filed before the commerce commission that past precedent means muni and co-op customers should be able to sell RECs, since in the past the Illinois Power Agency (IPA) — which procures power on behalf of ComEd and Ameren customers — has procured RECs from customers outside of those utilities’ service areas. “This new and unanticipated restriction eliminates large areas of Illinois from the RPS, conflicts with the statutory intent to benefit all Illinois residents, departs from the IPA’s historical practice, and creates uncertainty and confusion at the very moment that clarity and stability are most needed at the outset of the IPA’s new solar programs.”
Shannon Fulton is director of commercial sales for StraightUp Solar, the largest solar developer in downstate Illinois. She said the company installed 35 residential distributed solar projects, a total of about 550 kw, in muni and co-op territory in 2017, representing just over a third of StraightUp Solar’s business.
Now she fears that two projects in the works worth $96,000 could be canceled. And she said 12 customers who paid cash for recently completed solar installations likely did so with the expectation of incentives that they now won’t receive.