Illinois’s Illuminating and Ambitious Power Plan, with Gilbert Michaud

Top Quotes

• CEJA aims to decarbonize Illinois: “What CEJA does is put Illinois on a path to 100 percent zero-carbon energy by 2050. It has benchmarks for 40 percent renewable energy by 2030 and 50 percent by 2040 … It also aims to equitably phase out fossil fuel electricity generation, such as coal and gas, by 2045—building more renewables and shutting down coal and gas-fired power plants. It’s also focused on transportation, to some extent—thinking about how we can transition from the state’s polluting transportation sector off of fossil fuels, expand access to electric vehicles and charging stations and better public transit.” (12:25)
• An equitable transition to a clean energy economy: “[CEJA] provide[s] over $80 million per year for workforce development programs, specifically in disadvantaged communities. It’s specifically creating 16 new workforce hubs and a pre-apprenticeship program to train and create a pipeline of energy workers … It’s creating a training program for soon-to-be-released incarcerated persons for jobs in the solar industry and the energy efficiency sector … CEJA is also helping support communities dealing with coal mine closures, coal-fired power plant closures, and gas plant closures as we look out to the future.” (15:40)
• Other states can learn from Illinois: “One of the really exciting things about CEJA—and about what Illinois is doing, broadly speaking—is that it’s laying out a foundation for midwestern states and other states to look at what we’re doing as a policy leader, evaluating if we’re achieving our policy objectives and if we’re targeting and doing a good job at deploying more renewables, and [helping] disadvantaged communities. And then, as they think about their own policy adoption process at the state level, [they can consider] if they have those same desires.” (22:55)

Top of the Stack

• Captain Planet television show
• The Energy Gang podcast
• “Incorporating equity in the clean energy economic development landscape” with Gilbert Michaud on the Solar for All podcast
• “Illinois’s brilliant new climate, jobs, and justice bill” by David Roberts in the Volts newsletter

The Full Transcript

Daniel Raimi: Hello, and welcome to Resources Radio, a weekly podcast from Resources for the Future. I'm your host, Daniel Raimi. Today we talk with Gilbert Michaud, assistant professor of environmental policy at the School of Environmental Sustainability at Loyola University Chicago. Gilbert is an expert on the power sector and economic development.

In today's episode, he'll help us understand a new state law in Illinois called the Climate and Equitable Jobs Act. The bill aims to eliminate greenhouse gas emissions from the power sector by the mid-century and includes a variety of other provisions to help make the state's energy transition more equitable. Stay with us.

All right, Gilbert Michaud from Loyola University Chicago. Welcome to Resources Radio.

Gilbert Michaud: Thanks, Daniel. Great to be here.

Daniel Raimi: Gilbert, we're going to talk today about a new energy and climate policy that recently passed in the state of Illinois. Before we do that, we always ask our guests how they got interested in working on energy and environmental issues in the first place. What drove you into this field? Were you interested in this stuff as a kid? Did it develop over time? Can you give us your story?

Gilbert Michaud: Yeah. Good question. It's a manifold story. My interest in renewables and the environment is actually deep-rooted. I'm probably aging myself here a bit, but as a kid, one of my favorite TV shows and TV characters was the environmentalist superhero Captain Planet. He was tasked with saving the earth from environmental destruction and pollution. It's funny. My parents tell me stories about going to the beach in Maine as a kid growing up, and, instead of swimming or building sandcastles and hanging out with the other kids, I actually wanted to walk around and pick up litter. I guess I'll never really know how much of that show or my upbringing and background, broadly speaking, impacted my research interests.

When I finished my undergraduate degree in economics, I took a job at a business journal. They asked me what industry sector I wanted to cover, and I said the energy and power sector. That was my first job. My job was to find cool case studies to highlight in the journal—talking to electric utilities, talking to nonprofits, building renewable energy projects, companies investing in sustainable transportation. It was a really fun position. I got to talk to innovators and entrepreneurs that were leading the charge in the sustainable energy transition. This was about 10 years ago. I actually ended up leaving the job.

I knew that I wanted to continue studying these topics, and so I went to graduate school, got a master's and PhD, focused in renewable energy policy and planning and economic development, and here we are.

Daniel Raimi: That's so interesting. We must be about the same age because I grew up on Captain Planet too. If I remember right, the five elements are earth, wind, water, fire, and heart. Is that right?

Gilbert Michaud: I think that's correct. I'd have to look it up. I remember I had a little ring that I would put on my finger that represented each of those, I believe.

Daniel Raimi: Yeah, that's right. Together they formed Captain Planet. We'll have a link to Captain Planet in the show notes for all of you who are either very young or very old who may be listening and have never heard of Captain Planet.

Okay, let's move on to the substance of our conversation now. We're going to talk about this new bill that was recently passed in Illinois called the Climate and Equitable Jobs Act.

Before we do that, let's lay some groundwork. I know you've only been in Illinois for a few months, but can you help us by starting off with what does the electricity mix currently look like in the state? And how has it been changing over the last decade or so?

Gilbert Michaud: Good question. Illinois has a pretty unique electricity generation mix. A majority of the state's electricity actually comes from nuclear energy. It's a whopping 54 percent. Illinois is actually the state with the largest percentage of nuclear generation in the whole country. We have six nuclear power plants in Illinois, and thinking broadly, that accounts for about 13 percent of the country's nuclear generation as a whole. That’s a lot of nuclear energy in the state.

We have coal-fired power plants. That represents about 30 percent of the state's generation. About 10 percent is from renewables. A lot of that is from wind, in particular, and somewhere around 7 or 8 percent natural gas. These are our generation assets. They've changed over time, obviously. We're seeing the decommissioning of some coal-fired generation, of course.

The state of Illinois is served by two major investor-owned utilities. We have Commonwealth Edison, or ComEd, which serves Chicago and the northern portion of the state, and then Ameren Illinois, which serves the central and southern portions of the state, and they're the ones that own a lot of these generation assets. We actually generate more electricity in Illinois than we consume, so we're an exporter of electricity.

Daniel Raimi: That's interesting. I imagine it's because of all that nuclear generation, primarily. It's going to be running more or less 24/7, and so—especially at low demand times—it's going to be exporting. Can you give us a sense of what electricity policies the state had in place before this new bill came up and was recently enacted?

Gilbert Michaud: Prior to this new bill being passed, Illinois had a pretty traditional renewable portfolio standard (RPS) of 25 percent by 2026. I believe this was passed in 2007, so it's been around for a little while. For folks unfamiliar with this, an RPS is basically a state-level mandate that requires regulated electric utilities to have a certain percentage of their generation mix come from renewable sources by a certain date.

Again, 2026 is the target date of 25 percent renewable energy. That put the state's RPS in the middle of the pack: definitely better than some states, definitely worse than a few others. We had a few other policy mechanisms to encourage renewables, such as net metering policies and tax credits, but really the other major policy, Daniel, that Illinois had made news for was called FEJA or the Future Energy Jobs Act.

This had bipartisan support. It was enacted in 2016 and had a few important provisions. For instance, it said that Illinois would reduce its carbon emissions by more than 50 percent from 2012 levels by 2030. It also aimed to invest a lot of money, about $750 million, in renewable energy programs for low-income communities through a program called Illinois Solar for All. That was looking to help lower-income customers, nonprofits, and community centers access things like rooftop solar and community solar very pointedly. There was a really important and unique community solar piece to this bill, there was a job training component to this, and a few other pieces of FEJA related to energy efficiency. But really, the unique foundation that was laid here was the impacts to low- and moderate-income communities. It was a really important piece of energy and climate legislation at the time.

Daniel Raimi: That's really interesting. We're going to come back to that piece about community energy deployment, low-income support, and jobs. Before we get into that with this recent bill, I have one more background question, which is the role that nuclear power generation has played in the state for such a long time. My limited understanding of this is that some of the nuclear stations that were operating in Illinois were in danger of shutting down because of the market conditions that currently exist. Can you help us understand what the challenges have been facing those nuclear generators and how the nuclear sector wanted to encourage the legislature to support them?

Gilbert Michaud: That's correct, Daniel. This has been a really interesting wrinkle in the story. Basically, there's a large energy company called Exelon that owns all of these nuclear power plants in the state of Illinois. They had threatened to close a few different stations: Byron, Dresden, and Braidwood. Those three together are about six and a half gigawatts of capacity, so those really big electricity generation assets were generating a lot of electricity for the state.

They were basically saying, "Hey, we need help making it worth it to continue to operate these plants." They were claiming that there were hundreds of millions of dollars of revenue shortfalls. There's also a job component to this, obviously: these plants employ about 2,500 people, and so there's this job piece and local politics angle to this.

The biggest challenge with nuclear is that it struggled to compete against lower price natural gas in the wholesale electricity markets, given the fracking boom that continues in the United States. So, competition from cheaper natural gas—and also renewables now, too—these companies and these power producers that own these nuclear assets have been touting nuclear as a form of clean energy. In fact, it is zero emissions; you look at the towers from a nuclear plant, and that's not smoke coming out of there, that's water vapor. They've been lobbying the legislatures and saying, "Hey, we need help. We want to maintain and enhance our cost competitiveness through subsidies." Some folks use the term “bailouts,” and the policymakers, in return, have deemed this to be a really important and worthy investment as part of their state-level decarbonization plans, and so they've typically gone through this rate base recovery process.

They're basically increasing electricity rates, to some extent, for households and small businesses to keep these plants open. It's happened in Illinois, it's happened in Ohio, it’s happened in a number of other states, so I think this is going to be a really interesting development to follow in the electricity market as we continue to shift broadly to clean energy. I think nuclear is going to be a big part of that mix because it is zero emissions.

Daniel Raimi: It's been so interesting to see how different states have approached this—you mentioned Ohio and Illinois—and I think there are other approaches that differ in terms of technically the way that they do this in New York State and other states where they have zero-emissions credits, which are a different way of achieving the same goals.

Gilbert Michaud: Exactly. Yeah.

Daniel Raimi: Okay. All this preamble now brings us up to the bill that's at the center of our discussion, or the law that's at the center of our discussions—it's been passed and signed. As I mentioned before, it's called the Climate and Equitable Jobs Act, which we could call CEJA.

Gilbert Michaud: That's correct. CEJA is what people are calling it. Yeah.

Daniel Raimi: CEJA. Okay. That's not a particularly nice acronym, but we'll stick with it. Just headline numbers, what are some of the major targets that the bill articulates in terms of the power mix and emissions reductions over time?

Gilbert Michaud: This has really been a great bill. It's pretty monumental at the state level in the United States. I talked about FEJA a couple of minutes ago: that was a really big bill, and I think that CEJA is, once again, putting Illinois at the forefront, raising the bar on energy and climate policy. As you noted, it's the Climate and Equitable Jobs Act. It's really ambitious. It has a focus on equity and justice, which is really innovative.

Just some numbers for you all: It passed 83 to 33 in the House and 37 to 17 in the Senate, so pretty good numbers there. What CEJA does is put Illinois on a path to 100 percent zero-carbon energy by 2050. It has benchmarks for 40 percent renewable energy by 2030 and 50 percent by 2040. We're actually building about four times more renewable energy per year than under the aforementioned FEJA policy. It also aims to equitably phase out fossil fuel electricity generation, such as coal and gas, by 2045, so that will entail building more renewables and shutting down coal- and gas-fired power plants. It's also focused on transportation to some extent, so thinking about how we can transition from the state's polluting transportation sector off of fossil fuels, expanding access to electric vehicles and charging stations, and better public transit, especially for historically and economically disadvantaged communities. There's going to be this new electric vehicle coordinator at the Illinois Environmental Protection Agency that's going to oversee some of the sustainable transportation pieces, which is really cool.

One other important thing is, given the history, both in Illinois and in other states for that matter, of utility corruption, CEJA also works to reform utility accountability and ethics. It's implementing new standards for the financial and lobbying activities, so, for instance, prohibiting using ratepayer money for political support. They're creating a new oversight division in the ICC, the Illinois Commerce Commission, to audit and enforce these utility compliance standards. There's a lot of pieces regarding the workforce. We can talk about energy efficiency programs.

It's truly a historic and exciting piece of energy legislation at the state level that's going to stimulate jobs, reduce emissions, and really create an equitable clean energy future for the state.

Daniel Raimi: Right. It's so interesting. As you alluded to, there are lots of moving pieces in this bill, which is one of the things that makes it so interesting. Just one quick clarifying question, you mentioned the vote totals. I'm guessing that those were bipartisan getting those overwhelming majorities, but can you just clarify, was there considerable support from both sides of the aisle? Was it heavily tilted in one direction or another?

Gilbert Michaud: It was bipartisan, with pretty widespread support across both parties. I think, coming off of FEJA from five years ago where we had already established this baseline of support, it was well known that it was going to pass through the House and then the Senate, and then the governor signed it within a day or two right after that.

Daniel Raimi: Interesting. Gilbert, as you mentioned, there are substantial provisions in the bill around both labor, equity, and fairness. Can you dive into one or two elements that speak to those pieces of the bill, whichever ones you think are most interesting, and give us some more flavor for them?

Gilbert Michaud: Absolutely. In terms of labor, CEJA works to ensure an equitable share of the jobs and the wealth that's generated by this new energy economy. We talked about building more renewable energy projects, for instance, that this happens directly in disadvantaged communities, and for those that have been traditionally left behind, which is a really important part of this bill. What it does, more pointedly, is provide over $80 million per year for workforce development programs, specifically in these disadvantaged communities. It's specifically creating 16 new workforce hubs and a pre-apprenticeship program to train and create a pipeline of these energy workers that are needed given these new demands. It's also creating a training program for soon-to-be-released incarcerated persons for jobs in the solar industry and the energy efficiency sector. I know that we've talked a lot and done a lot of work on just transitions, and CEJA is also helping support communities dealing with coal mine closures, coal-fired power plant closures, gas plant closures, as we look out to the future.

A couple of numbers on this: they're providing about $40 million per year in community transition grants, as they've termed them. That can help with a lot of different things, even replacing property tax dollars that might be lost. They're also creating a scholarship fund for displaced workers and their children. There's so much more to the bill. These are just a few highlights, especially related to labor and this focus on disadvantaged communities. The entire bill is over 900 pages long. It's literally a big bill in terms of its page count. It's monumental. I think it's taking an aggressive stance on the climate crisis, and taking really bold action toward these things that I mentioned: a 100 percent clean energy future; equitable job training for lower-income, formerly incarcerated, displaced fossil fuel workers; and really importantly, aggressive utility accountability measures. It's a really great success story of grassroots advocacy, and it shows the power that communities have in shaping their clean energy future and really bubbling up and changing policy at the state level. I'm super excited about it.

Daniel Raimi: It shows. That's great. Maybe one follow-up question on that is the $40 million for fossil energy communities that you mentioned. Do you know if that's focused on power plant communities, or is it also focused on coal mining communities? Because most people don't know this, but there's actually quite a bit of coal mining in southern Illinois.

Gilbert Michaud: Yeah, there is a bunch of coal mining in southern Illinois. To my knowledge, it's related to all the above, both dealing with transitioning coal mine communities, and then also those with the coal-fired power plants.

Daniel Raimi: Great. Interesting. We've been talking about dollars and cents, or at least, partly about dollars and cents. In the last question, you helped us understand the scale of some of the investments. But it's also important to know where those dollars are coming from. Do you have a sense of how much the bill is expected to cost and how those dollars are going to be distributed? Is it going to affect ratepayers mostly? Is it going to go onto the general tax base? Is it going to come from other places? Can you help us understand what the costs are and how they'll be distributed?

Gilbert Michaud: This is a really good and important question. We have to think about the costs and the downsides if you want to frame it like that. In most studies or projections, there's a wide range of numbers that I've seen. I haven't crunched anything myself, to be transparent, but I've seen estimates as high as $15 a month extra for the average residential ratepayer in Illinois, to as low as about $4 a month extra. There's a wide range. That latter number comes from the Citizens Utility Board, which is a nonprofit group that advocates for clean energy and ratepayer protections. It's an interesting range. More of the estimates I've seen are closer to the lower bound. As you know, you have to be mindful of who's coming up with these numbers, what assumptions they're making in their models, and what agendas they might have.

Anyway, I think it'll probably end up being somewhere in the middle of those two figures. If you scratch this out on the back of an envelope, this is somewhere around an extra 100 dollars per year, probably, for the average person in Illinois. You have to weigh these costs against the projected benefits that I noted, job creation, cleaner air and water, et cetera. I think for a lot of people, especially those with a high level of environmental altruism, it's really a no-brainer.

Daniel Raimi: I don't know if I would put myself in the altruistic category, but I am one of those people who do pay extra for clean electricity coming into my house, so I understand that sentiment. Well, Gilbert, this has been really interesting. One other question to ask you that I'd love to hear more is to what extent are there provisions in the bill or perhaps in other existing laws that seek to protect low-income consumers from facing those higher costs that you have just described?

Gilbert Michaud: This is part of CEJA as well, so it's a good question. It has a few pieces that are attempting to reduce the energy burden on lower-income consumers in the state. For instance, it bans late payment fees on electricity bills for lower-income residential customers, which is really important. They're going to undertake a new study as well to establish a low-income electricity rate for these customers, so that's unique. I haven't heard of that before. I'll be interested to follow how that works. I also know that they're providing funding to do a better job at fixing health and safety issues when they're working on energy efficiency measures in low-income homes. There are a few different tidbits around that topic.

Daniel Raimi: Gilbert, last question now before we go to our Top of the Stack segment, and it's a question about federalism. As our listeners know well, there are lots of different state-level energy and electricity policies. There's enormous variation. Lots of states are taking varying approaches. We've talked in this show about California and New York and New Mexico and other states. How do you think about this issue in the context of this specific bill? What are the actions that Illinois is taking? How does that contribute to efforts that other states might take in the future?

Gilbert Michaud: Good question, Daniel. This is a really important piece of this. It sounds like your listeners know we have this separation of powers. We have things going on at the federal government, but at the state level, states hold a lot of power in the energy policy realm, such as with net metering laws, RPS, tax credits, and other incentives such as those.

One of the really exciting things about CEJA—and about what Illinois is doing, broadly speaking—is that it's laying out a foundation for Midwestern states and other states to look at what we're doing as a policy leader, evaluating if we're achieving our policy objectives and if we're targeting and doing a good job at deploying more renewables, and helping disadvantaged communities. And then, as they think about their own policy adoption process at the state level, considering if they have those same desires of deploying clean energy, reducing pollution, assisting with workforce transitions, and helping out coal mine and coal-fired power plant impacted communities. Through this very traditional diffusion of the innovation process, over time and over geography at the state level, it's really exciting to see Illinois be a leader in this space.

I'm hopeful that other states in the region will follow suit. I know, for instance, about a week after CEJA passed and was announced, the state of Ohio implemented this new program, or is trying to pass this new bill entitled the Energy Jobs and Justice Act. We're already starting to see some of this diffusion process happen, which is exciting.

Daniel Raimi: That is so interesting. From nearby in the state of Michigan, it’ll be interesting to see what happens here where I live as well. Well, Gilbert, thank you so much again for coming on the show today and helping us understand this really interesting new piece of legislation. It's going to be fascinating to watch it play out in the years ahead.

Let's move now to our Top of the Stack segment, where we ask you what you've read or watched or heard recently that you'd recommend to our listeners. It can be related to the environment or even just tangentially related to the environment.

I'll start with a recommendation for folks who want to go even deeper on this bill. It's a podcast episode from David Roberts, who writes the Volts newsletter and has the Volts podcast. One of the recent Volts episodes was actually David Roberts talking through this bill in quite a healthy level of detail. If you want the next layer of detail down in this bill, it'd be a really great resource. It's called “Illinois’s Brilliant New Climate Jobs and Justice Bill.” Again, it's the Volts podcast. It's a pretty cool podcast, so I'd recommend you check it out. How about you, Gilbert, what's at the top of your literal or metaphorical reading stack?

Gilbert Michaud: I second the David Robert suggestion. It's a great listen. Definitely check that out. I've already recommended, I suppose, Captain Planet, so maybe we'll have some folks pulling out the VHS from the 1990S.

Daniel Raimi: Absolutely.

Gilbert Michaud: Not to offer competing podcasts, but here are a couple of others I like. My favorite podcast in the energy space historically, Daniel, is called The Energy Gang. I highly recommend it to folks interested in renewable energy and cleantech. I think what's really exciting about the energy transition is how rapidly this transformation is occurring. The podcast does a really good job at hitting on current events, such as the Texas grid failure, Biden's climate policy, and a lot of other things like that. Jigar Shah was a part of the podcast for many years, and he's a big name in energy that folks probably know about. He's now with the Department of Energy. Katherine Hamilton is another member of this gang. I was fortunate enough to meet her in Chicago before I lived here, a few years ago at an award ceremony. She's from Virginia, and so we have Virginia connections, and it's been fun to follow her work. The Energy Gang is the first one.

One more quick one for you, maybe a shameless plug in some ways. There's a brand-new podcast called Solar for All. This was started and is done by a good friend of mine named Geoff Greenfield. He runs solar companies in both Ohio and Colorado. There are really good conversations at the intersection of renewable energy and equity and justice. I was a guest on one of the recent episodes. If folks want to hear me talk more about equitable jobs specific to the solar industry, you should check it out.

Daniel Raimi: That's great. All right. Well, people are going to be filling up their smartphones with podcast recommendations based on today's episode. All good recommendations. Thank you again Gilbert Michaud from Loyola University Chicago. Thank you so much for joining us today on Resources Radio, helping us understand this really fascinating new piece of legislation. We really appreciate it.

Gilbert Michaud: Thanks, Daniel. This has been fun. I appreciate you having me on.

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