CLOSUP Student Working Paper Series Number 58

April 2020

Spearheading “Solar for All” in the Midwest: How Illinois passed legislation to incorporate solar energy in low-income and environmental justice communities

Livvy Hintz, University of Michigan

This paper is available online at http://closup.umich.edu

Papers in the CLOSUP Student Working Paper Series are written by students at the University of Michigan. Any opinions, findings, conclusions, or recommendations expressed in this material are those of the author(s) and do not necessarily reflect the view of the Center for Local, State, and Urban Policy or any sponsoring agency

Center for Local, State, and Urban Policy Gerald R. Ford School of Public Policy University of Michigan Livvy Hintz

Environ 302

29 April 2020

Final Paper

Spearheading “Solar for All” in the Midwest: How Illinois passed legislation to incorporate

solar energy in low-income and environmental justice communities

Abstract

As policymakers progress further into finding sustainable, renewable energy solutions for the United States, local and state governments have been fixating on solar power. The price of solar energy has dropped dramatically in recent years — but not quite low enough for low-income communities to independently make an investment. In order to mitigate the environmental injustice and economic inequity of solar installation, policies can be proposed to allow low-income customers to benefit from solar energy. This paper uses a case study of

Illinois’s passage of the Future Energy Jobs Act of 2016, a bill that dedicates millions of dollars to community solar projects, low-income solar job training programs, and solar incentives for low-income communities. It finds that although the bill had bipartisan sponsorship, the supporting and opposing sides in the Illinois House of Representatives still remained heavily partisan. Furthermore, the results find that the funding behind the nuclear power plant bailout caused numerous concerns for skeptical representatives on both sides of the aisle, including state fiscal impact and the unknown effect on ratepayers. The important role partisanship and financial

1 concerns played for FEJA suggests that a highly developed, cost neutral fiscal plan is crucial for gaining support for energy justice legislation in the Midwest.

Introduction

As we progress further into finding sustainable, renewable energy solutions for the

United States, local and state governments have been fixating on solar, where radiant light and heat from the Sun is harnessed using various technologies, like solar panels, to convert into energy. Solar energy has several environmental, economic and policy advantages: reduced carbon dioxide emissions, more energy supply diversification and regional/national energy independence (Heng, 2020). In recent years, there has been a rapid decrease in solar installation cost and a rapid increase in solar technology and innovation advancements. Despite the widespread movement toward largely incorporating solar power into the future of energy, its capacity and relevance in policy still significantly differs across the U.S. states (Heng, 2020).

As mentioned previously, the price of solar energy has dropped dramatically — but not quite enough for low to middle income families to independently make an investment. According to research by Solar Energy Industries Association, an average-sized residential system costs around $18,000 (SEIA, 2019), which is a hefty upfront cost for families living paycheck to paycheck — even though solar will financially benefit them in the long term. The inequity of solar installation is not only a case of economic and environmental injustice, but also an impediment to transition to complete solar energy, since low to middle income rooftops make up around 42% of total US residential solar potential (Sigrin, 2018).

2 As a result, a number of governments are taking steps to make solar energy accessible to low and middle income customers. In recent years, “solar for all” programs have gotten traction nationwide. However, while most of the earliest programs were implemented in states on either the East and West Coast (Heeter, 2018), there was one Midwestern outlier: Illinois. Through a case study analysis of the Future Energy Jobs Act of 2016 (FEJA), this paper will determine how ​ Illinois passed bipartisan legislation that called for the incorporation of solar energy and clean energy job training programs in low income and environmental justice communities. By analyzing the legislation throughout the course of its lifespan, this research will discover the role that politics and the bill’s potential fiscal impact played in the road to solar justice in Illinois.

Literature Review

In order to ensure an equitable procedure for solar energy implementation, it is vital to look at past environmental laws, regulations and policies that have failed in terms of environmental justice. First, this paper will look at research highlighting environmental injustice in water policy execution, and then specifically analyze relevant research in the energy space.

I. Environmental Injustice in Water Policy

Countless studies have concluded that disparate-impact discrimination exists, since low-income and minority communities are at disproportinate danger for environmental harm

(Cory & Rahman, 2009). This specific form of inequity plays a role in almost every environmental policy arena, but one is notorious for enabling public health crises: water quality policy. Research by Cory and Rahman (2009) examined this issue in the context of enforcing the

3 safe drinking water act (SDWA), specifically the association between race, income and hazardous levels of arsenic concentration in drinking water in Arizona. The study analyzed community-level exposure to arsenic in companion to socioeconomic and demographic characteristics, and discovered, in parallel to similar studies, that without selective, supervised ​ implementation and enforcement of the SDWA in environmental justice communities, arsenic standard is likely to disproportionately disadvantage minority or low-income groups in Arizona.

These results reveal a notable conclusion: under-resourced and historically disadvantaged communities require individual implementation and enforcement of general environmental legislation, since they are disproportionately at risk for environmental harm, such as arsenic poisoning.

Most often, environmental justice communities are not given proper funding or legislative support to mitigate water quality complications before they arise. Consequently, these areas are zones with higher levels of pollution and health concerns. A study assessed two

Maryland watershed restoration and mitigation programs to determine whether they were distributing resources equitably across all demographics — specifically with respect to race and socioeconomic class (Dernoga et al., 2015). The researchers matched the location and regulation of wetlands involved in Maryland’s wetland mitigation program to the distribution of grant funds designated by Section 319(h) of the Federal Clean Water Act, which are used to help eradicate water quality impairments caused by nonpoint sources of pollution (Dernoga et al., 2015). The results were able to explicitly connect watersheds in non-white communities to lower funding by the state and allocation of Section 319(h) dollars. Thus, similar to the findings in Arizona, it is crucial that environmental policies specifically address the need for stronger implementation,

4 enforcement and funding in historically disadvantaged communities. Otherwise, these areas will continue to combat disproportionate environmental harm and health concerns.

II. Energy Equity

After recognizing the impact race and socioeconomic status have on issues of water quality, it is critical to understand environmental injustice in terms of another everyday resource: energy. Before discussing the need for equitable implementation of renewable, specifically solar, energy, we must first examine current energy disparities in low-income households. In research utilizing data from two U.S. national surveys, Xu and Chen (2019) found that affordability and accessibility to advantageous energy programs and appliances remain critical problems for low-income households. For example, low-income households have lower participation rates in energy assistance programs and own fewer energy efficient appliances, including smart grid technologies (Xu & Chen, 2019). Additionally, low-income households seemed to be less educated on universal ways to be energy efficient — such as how to control a programmable thermostat. Thus, socioeconomic status directly correlates to a household’s accessibility to energy efficiency, which is a fundamental component for economic, health and environmental benefits. This research provides evidence to policymakers that low-income communities are already disadvantaged with the current U.S. energy landscape, and that solar energy programs and policies should not only address proper implementation, but also equitable implementation. ​ ​ Before rapidly transitioning from nonrenewable energy, such as coal, to solar energy in any community, public opinion on the policy transition has to be determined. In order to discover public perceptions of the two energy sources and for energy transition policies, Crowe and Li

5 (2020) sampled citizens in three areas with varying ties to coal and solar energy: Saline County,

IL, Houston, TX, and Burlington, VT. The data suggests that location has a significant impact on how people view and support certain energy policies. Although residents in cities with a historical attachment to coal mining have positive thoughts on coal, they react even more positively toward more sustainable energy sources. In order to encourage these enthusiastic attitudes toward solar power, further development on infrastructure and government assistance is needed in these communities (Crowe & Li, 2020). Thus, in order to ensure an efficient, effective transition from fossil fuels to renewable energy, federal and state governments should target communities with historic ties to the coal industry (and other fossil fuels). Since historic coal mining often correlates with low to moderate income and environmental justice communities, this research can predict what public opinion may be toward solar energy in these specific areas.

Once public opinion toward solar energy is positive, it is important to have successful solar implementation in communities of all demographics. As stated before, the adoption of solar ​ ​ energy has the possibility to not only lower carbon emissions, but also electricity bills. However, due to the high upfront cost of solar paneling, it is uncertain whether solar energy is being incorporated equitably across all socioeconomic levels and in historically disadvantaged communities. A 2019 case study on solar distribution in California found that, despite several policies on “solar support,” there are significantly lower levels of solar paneling in disadvantaged communities (Lukanov & Krieger, 2019). The report utilized California’s own database,

CalEnviroScreen, to track environmental justice communities and determine the rate of solar adoption in those areas. Thus, not only are the state’s “solar for all” style policies not performing to their intended potential, but also are continuing to block lower income communities from

6 benefiting from clean energy — which has been proven to connect to good health and strong financial investment. The results encourage California to develop more effective policies that will follow through on their goals of solar justice in under-resourced communities.

Once the need for solar energy in low to middle income and environmental justice communities is recognized, policymakers are able to craft effective solar programs to combat energy injustice. In order to assist this effort, there is a growing field of study on “deliberative dialogue” — which consistently finds that conversation with constituents and stakeholders can be a crucial tool in decision-making for complex issues, such as solar energy policy. Thus, in order to gather dialogue on solar justice programs from a stakeholder’s perspective, researchers

Dolter and Boucher (2018) designed a half-day workshop to discuss solar implementation in

Saskatchewan, Canada from a government owned utility, Saskatchewan Power Corporation

(SaskPower). Not only was this study the first use of deliberative dialogue in blueprinting solar energy programs, but also concluded an essential element of energy policy decision-making: due process (Dolter & Boucher, 2018). In essence, due process in terms of energy justice means notifying citizens who will be affected by solar energy implementation, and allowing them a chance to comment on the action. In order to have a beneficial, celebrated solar justice program, policymakers and government entities must include stakeholder feedback in their decision-making — especially in under-resourced communities, whose voices frequently get disregarded in governmental choices.

7 Summary of Literature

After studying the research surrounding environmental injustice in both the water and energy policy sectors, there is a clear open space for further investigation: what exact programs have been enacted to incentive solar for low-income households, and how? Although Lukanov and Krieger’s (2019) research provided evidence for the inequity of solar distribution, it did not discuss the details of California’s low-income program, like what is included in the bill and how it was implemented. Moreover, Dolter and Boucher (2018) gathered dialogue evidence from their half-day workshop in the province of Saskatchewan, but lacked information on the government’s active steps toward solar implementation, or what has been enacted so far in the community. Thus, while acknowledging the importance of public opinion in policy, this paper searches to understand what low-income solar energy policies have been adopted, and more ​ ​ importantly, how these policies navigated partisanship and varying economic views in a state’s ​ ​ legislature. In order to accomplish this, this research will examine a case study of Illinois’s

Future Energy Jobs Act to discover the role that politics and the bill’s potential fiscal impact played in the likelihood of “solar for all" policy adoption.

Background

The Future Energy Jobs Act (Senate Bill 2814) has been labeled as “one of the most significant pieces of energy legislation ever to pass the Illinois General Assembly,” according to

The Citizens Utility Board in Illinois (CUB, n.d.) and several other clean energy and environmental justice organizations.

8 After nearly two years of negotiations with stakeholders, which included environmental justice groups, energy companies and consumer advocates, the Democrat-controlled Illinois legislature passed the bill with bipartisan votes in both houses. The Republican Governor Bruce

Rauner signed it into law on December 7, 2016.

The bill has three key features that will impact Illinois consumers: (1) energy efficiency

(2) renewable energy and (3) job training and payment help. In addition to lowering residents’ power bills and investing in wind and solar power, the bill implements comprehensive programs to diminish the systemic barrier between low-income households and communities and solar power.

Under FEJA, all the money generated by Renewable Portfolio Standard compliance credits will be put into a central fund of more than $200 million a year, which will be controlled by the Illinois Power Agency (IPA). IPA is required to spend these funds on Renewable Energy

Credits (REC), and the new bill forces IPA to spend a large portion of the money on “new build” projects. Distributed energy and community solar projects will receive 50% of the funds — with

25% of those going directly towards the state’s first community solar program, where lower income customers and customers without access to a solar-suitable roof will be able to invest in the benefits of the new technology (Future Energy Jobs Act). These projects will focus on public buildings, such as schools or faith-based community centers.

In addition to REC funds, the bill invests more than $750 million in programs for low-income communities. One of these programs is titled “Illinois Solar for All,” which will provide incentives for low-income households and nonprofit and public facilities to choose solar.

9 Another program will provide solar job training programs for low-income residents and those located within environmental justice or historically underserved communities.

Finally, the legislation also invests 30% of the total sum into two nuclear plants owned by

Exelon, a multibillion dollar utility holding company. These plants, located in Clinton and Quad

Cities, lost $800 million in the past seven years (Roberts, 2016) and were scheduled to close.

Legislators in those districts worried about the loss of jobs and the economic activity the plants brought in for their constituents, but some critics labeled this section of the bill as a bailout.

Methods

This situation can be categorized as an influential case (Seawright and Gerring, 2008), because bipartisan clean energy economic development packages like FEJA are not common.

According to a statement about FEJA from the Environmental Defense Fund, “with Gov.

Rauner’s signature, Illinois is sending an important message to the rest of the nation” (EDF

Blogs, 2016).

In order to understand exactly how Illinois’s progressive energy bill got passed, this paper ​ ​ analyzes two key aspects of the legislative process: (1) politics, specifically the partisanship of the bill’s approvers and disapprovers, and (2) the potential fiscal impact of the bill, and how abundant economic impact was in the conversation. This analytical framework is outlined in

Figure 1.

10

Figure 1: Graphical depiction of the paper's analytical methods framework. ​

In order to replicate Illinois’ legislation in other Midwest states, it is important to dissect the political landscape of the state during the time of the bill’s passage. Although Illinois has become increasingly Democrat-controlled throughout history, the state still follows similar party-switching patterns to some of its Midwestern counterparts, like Minnesota, Iowa, Missouri and Wisconsin. In 2014, the victory of Republican Bruce Rauner for governor broke the state’s

“state government trifecta,” a term that describes a single party government, where one party holds power in both legislatures and in the governor’s office, that was in place for more than a decade.

In addition to comparable political make-up, the energy and utilities market is similar in

Midwestern states, due to their geographic location. Oftentimes, the United States Department of

Energy addresses the Midwest states (Missouri, Michigan, Minnesota, Ohio, Wisconsin, Indiana, ​ Illinois) as a unit, in reference to energy statistics and forms of production. Illinois can be used as

11 a guide to how energy justice can be implemented in a Midwest state, since the states share several characteristics when it comes to energy producers and policy.

After understanding the political landscape in Illinois during the bill’s passage — a

Democrat-controlled Senate and House of Representatives coupled with a Republican Governor

— it is important to not only identify the actors that contributed to the passing of the bill, but also those who rejected its approval and why. As mentioned previously, understanding the political process can assist a replication of the progressive legislation in similar states. In order to do this, this paper looks for the most prominent sponsors of the bill by examining their activity in the

Illinois Senate bill readings and the House of Representative bill readings, along with their sponsorship on the bill itself. Conversely, the research will acknowledge who the main critics were in both chambers using the same resources. On the side of the opponents, the results acknowledge their main critiques of the bill, and examine if the side is overwhelmingly populated by one party. This research will focus on the debates in the House of Representatives, since that is where a significant portion of the arguments are found. Since FEJA was widely-known as a bipartisan piece of legislation, this paper analyzes what role, if any, partisanship played in the bill’s final vote turnout in the House of Representatives and the

Senate, using voting data collected after the final debates on December 1, 2016.

Additionally, this paper examines the potential fiscal impact of the bill, and how the economic effects influenced the supporters, critics and overall passing of the bill. First, the results analyze the bill’s fiscal plan for accumulating millions of dollars worth of funds for the

Illinois Power Agency. The results find that the fiscal plan was heavily influenced by outside actors — including power distribution companies and nuclear power plants. Furthermore, the

12 research determines how the bill’s progressive programs were paid for. It also examines how significant the bill’s economic impact was in the House and the Senate decisions, by utilizing similar resources as the previous method. The results discover which, if any, revisions were made to the original document due to too much or too little fiscal impact — and who the ​ ​ ​ ​ proponents were for both measures.

Results of Politics

Since the House of Representatives and the Senate experienced SB2814 differently, this paper will break down the role of politics in the two chambers separately, based on a chronological timeline.

The bill was introduced on February 17, 2016 by Senator Don. Harmon (D). The original bill looks completely different from the finished product — since almost all of the notable additions were done through House Amendments. In fact, Senator Harmon’s (D) bill focused on

“promoting competition in the natural gas market for all classes of customers” and identifying barriers to competition, and then eliminating them (“Bill Status of SB2814”). The untouched and unrevised bill passed the Senate on April 6, 2016 with no documented opposition. Senator

Harmon (D)’s name was eventually removed from one of the bill’s sponsors, once the bill returned from the House to the Senate. Although there is no direct evidence explaining why his name was removed, it is possible he was against the House’s substantial revisions to SB2814.

This theory indicates a possible reason for why Senator Harmon (D) decided to abstain from voting in the final Senate debate (99th General Assembly, 2016b, p. 1). Since the exact story behind this incident is unclear, there is an opening for future research to be done in this area.

13 Once SB2814 arrived in the House on April 6, 2016, it traveled through committees, new amendments were filed (“Bill Status of SB2814”), and, according to those who worked on the bill, scores of hours were dedicated to hearings with stakeholders (99th General Assembly,

2016a, p. 88). Although there was not any documented activity in the House of Representatives transcripts during the seven-month-long period of committee meetings and fiscal notes, the recorded timeline on the Illinois General Assembly website illustrates major developments. Most significantly, the refurbished bill’s nine key sponsors are revealed, which resulted in three

Republican House Co-Sponsors and six Democrat House Co-Sponsors (“Bill Status of

SB2814”). Although the bill is considered “bipartisan,” meaning it involves the agreement and cooperation of two political parties that are usually at opposition, the sponsorship does not fall equally among the two parties. Rather, it is a 2:1 ratio — with the Democrats being the majority power.

At this point, it is important to acknowledge the makeup of the Illinois House of

Representatives during the 99th General Assembly, or when SB2814 was on the table. The

Illinois House of Representatives during this time was defined as Democrat supermajority, who held 71 representatives compared to the Republican’s 47 representatives (“Illinois House of

Representatives”). Overall, the 2:1 ratio of Democrat to Republican co-sponsors for SB2814 fairly accurately represents the proportion of Democrat to Republican members in the House of

Representatives. Thus, by looking at the bill’s sponsorship, it is clear the bill was undoubtedly openly supported on both sides of the aisle.

However, according to the third reading and short debate that took place in the House on

December 1, 2016, out of the ten representatives that spoke out against the bill, three were ​ ​

14 Democrats and seven were Republicans (99th General Assembly, 2016a, p. 89-152). While the supporters fell somewhat equally between the two parties, the dissenters leaned slightly toward the side of the Republicans.

In order to learn more about the bill’s critics and the connection to partisanship, it is crucial to examine the reasoning behind the negative votes. Arguments (see Table 1) varied from unknown fiscal impact — which will be examined more extensively in this paper’s second results section — to disbelief that carbon emissions are damaging to the environment. Two of the opposers, Representative Morrison (R) and Representative Ives (R), after reaching their speech’s time limit, took advantage of an extra five minutes gifted to them from a fellow Republican representative to further their argument. Thus, these two representatives characterized themselves as the strongest opposers to the bill — and they are both Republican.

Specifically, Rep. Morrison (R) believed “Illinois has benefited from deregulation, from having a competitive energy marketplace,” (99th General Assembly, 2016a, p. 90) and it is

“based upon wild assumptions” that carbon has a negative environmental impact, “many of which have come grossly untrue” (99th General Assembly, 2016a, p. 91).

Similarly, Rep. Ives (R) spoke against the nuclear power plant bailout, and believed supporting renewables is not a market driven solution, stating they “build subsidy upon subsidy” and “subsidizing only leads to inefficiencies in the market” (99th General Assembly, 2016a, p.

104). Along with Rep. Morrison (R) and other opposers, she wanted her counterparts to trust in the free market.

15 Table 1: SB2814’s Vocal Objectors in the Illinois House of Representatives

Representative Name and Reasoning Political Party

Rep. Batinick (R) Against a bailout, fiscal impact

Rep. Morrison (R) Against regulating the energy market, does not believe carbon emissions have negative environmental impacts, fiscal impact

Rep. Ives (R) Costly to ratepayers, against a bailout, doesn’t support increase of renewables

Rep. Yingling (D) Against a bailout, cost to ratepayers is unknown

Rep. McDermed (R) Against regulating the energy market

Rep. Kay (R) Against regulating the energy market, against a bailout, doesn’t believe the coal industry is represented fairly

Rep. Davisdsmeyer (R) Doesn’t believe the coal industry is represented fairly*

Rep. Ford (D) Bill’s promise of new jobs will not expand to his district

Rep. Leitch (R) Bad elements haven’t been worked out yet

Rep. Scherer (D) Too many loose threads to the bill regarding cost to ratepayers, doesn’t feel comfortable supporting *Representative Davidsmeyer (R) says he would support the bill if the coal industry is represented more, to which Representative Rita (D) says they will be.

Source: 99th General Assembly, 2016. ​

As shown through Table 1, there were several arguments that overlapped specifically ​ among Republican dissenters: fiscal impact, against market regulation, renewables are not the answer. These reasonings correspond with the Republican party’s well-known core values, including limited government interference in the market (i.e. against market regulation and fiscal impact) and supporting traditional forms of energy production, like natural gas and coal (i.e.

16 renewables are not the answer). However, as shown through Rep. Yingling (D)’s argument, there was one section of the bill that received bipartisan pushback: the nuclear power plant bailout and its unknown cost to ratepayers. Rep. Scherer (D) echoed these concerns in her vocal objection to the bill, asking “what’s going to happen to everyday people if this bill passes?” (99th General

Assembly, 2016a, p. 149).

Thus, although the bill embraced bipartisan support, SB2814’s dissenters and their arguments were overpowered by Republicans and central conservative values, like the crucial need for competition in the marketplace — with the exception of the opposition to the nuclear power plant bailout, which crossed party lines.

Table 2: SB2814’s Voting Record in the Illinois House of Representatives

House of Yes No Not Voting (NV) Representatives

Democrats 44 (70%) 16 (42%) 4 (66%) ​ ​ ​ Republicans 19 (30%) 22 (58%) 2 (33%) ​ ​ ​ Total 63 38 6

Source: 99th General Assembly, 2016c, p. 1. ​

The final vote count (see Table 2) is more evidence to represent there was partisanship on ​ ​ the sides of the supporters and the opposers in the House. The Democrats represented more than double of the ‘yes’ votes. The number of Democrats who voted ‘yes’ noticeably exceeds half of their total number of representatives in the House, while the number of Republicans who voted

‘yes’ is less than half of their total representation. Surprisingly, Rep. Morrison (R) — one of the

17 bill’s most vocal dissenters — decided to abstain from voting, rather than voting ‘no’ (99th ​ General Assembly, 2016c, p. 1). The reason behind this choice is unknown, and unfortunately unable to be determined by simply looking at the voting record. Furthermore, although the difference in Republican ‘yes’ and ‘no’ votes was not substantial, the bill’s passage would not have been possible without the significant portion of supportive Democrats. Therefore, although ​ the bill received the support of both parties, SB2814 still performed considerably better among

Democrats than Republicans.

Once the bill arrived back to the Senate on December 1, 2016, there was minimal debate time given the bill’s dissenters and their oral arguments. However, unlike in the House, SB2814 had more Republican sponsorship than Democratic, with four Republican Co-Sponsors and only one Democrat Co-Sponsor (“Bill Status of SB2814”). This sponsorship is surprising, because similar to the House, Republicans are in the minority in the Senate. In fact, there were 39

Democrats senators and 20 Republican senators while SB2814 was on the floor — which also represents a three-fifths supermajority (“Illinois State Senate”).

Table 3: SB2814’s Voting Record in the Illinois Senate

Senate Yes No Not Voting (NV)

Democrats 24 (75%) 9 (50%) 6 (66%) ​ ​ ​ Republicans 8 (25%) 9 (50%) 3 (33%) ​ ​ ​ Total 32 18 9

Source: 99th General Assembly, 2016b, p. 1. ​

18 Despite the overwhelming amount of Republican sponsorship compared to their overall representation, the bill failed to gain support from most Republican senators. Instead, as shown in Table 3, the bill only attracted four supporters in addition to the four Republican Co-Sponsors.

Similar to the House, the bill performed extremely well among Democrats, with more than half of Democrats voting ‘yes’ for the newly revised bill. On the other side of the aisle, more than half of Republicans remained in the ‘no’ or ‘NV’ range.

Analysis of Politics

In both chambers, there were several pieces of evidence to breakdown the bipartisanship narrative surrounding SB2814. In the House of Representatives, although the bill had bipartisan sponsorship, the majority of supporters were Democrat, while the majority of opposers were

Republican, shown through the recorded oral arguments and the final voting record.

Comparably, in the Senate, the bill received overwhelming support from the Democrats, but

‘yes’ votes from less than half of Republicans — despite Republican representatives being four out of the five co-sponsors for SB2814.

Thus, since the supporters in both chambers were majority Democratic and the critics were majority Republican, this political process seems to work well in a legislature with a

Democratic majority. In fact, inferring from the numbers, FEJA presumably would not have ​ ​ passed if either chamber had more Republican representatives.

Since this paper’s goal is to determine how the progressive piece of legislation can be ​ ​ replicated by other Midwestern states in similar energy market situations, the results indicate a significant barrier. The passage depended on backing from the Democratic majority, which is a

19 structure most of the Midwestern chambers do not have. For example, Michigan, Ohio and

Indiana have had almost a decade of Republican control of the House of Representatives and the ​ ​ Senate. Although states like Minnesota, Iowa, Missouri, and Wisconsin have seen Democratic control in areas of the legislature fairly recently, they often switch between the two parties, and rarely encounter Democratic control in both chambers. Therefore, Illinois’s surrounding states will be met with a greater challenge in passing comprehensive clean energy legislation, because there is no guarantee of Democratic power. In conclusion, although SB2814 had bipartisan support, it did not have to travel through bipartisan chambers, which is the structure of almost every other Midwestern state legislature.

Finally, SB2814’s critics echoed arguments that correspond with several well-known

Republican values, such as supporting deregulation and maintaining a free market with limited government interference. Since these critiques are universal (and not specific to Illinois’s energy situation), it is likely that they would be repeated in a greater volume in Illinois’s surrounding states, considering the larger presence of Republican representatives. These critiques will undoubtedly be another roadblock for replication in other states. Additionally, if a state is coupling clean energy legislation with a nuclear bailout, unification of the Democrats could be equally difficult, as a bailout proved to be a bipartisan point of contention.

Results of Fiscal Impact

As mentioned previously, SB2814’s fiscal impact on the state of Illinois and its residents has been a point of contention for the opposition. In order to understand how the economic

20 impact affected the bill’s supporters, opposers, and revisions, this paper will initially investigate

FEJA’s fiscal plan for accumulating millions of dollars for sweeping clean energy legislation.

The bill offered two central plans for funding: (1) using money generated by renewable compliance credits and (2) utility rate increases for “investments in energy efficiency and conservation” (Lydersen, 2016).

First, all of the money generated by RPS compliance credits will be put into a central budget of more than $200 million a year for the Illinois Power Agency. From here, the IPA will spend their funds on renewable energy credits, or RECs, to produce existing or new solar projects. This sum of money is known as the “RPS funding pool” (Roberts, 2016).

Second, ComEd and Ameren, the two distribution utility companies that handle power distribution and billing for consumers in Illinois, will implement residential rate increases.

According to the companies, consumers are assured these rates will not increase more than an average of 25 cents per customer per month in ComEd territory and 35 cents in Ameren territory

(Roberts, 2016). The governor successfully implemented a last-minute rate cap clause pledging those commitments before the House’s final debate on December 1, 2016. Despite these efforts, critics had argued that the rate caps in the bill were loosely defined and unenforceable, and they were likely to go up much more than promised. Also, in order to pay for the nuclear plant bailout, the bill creates a “Zero-Emission Standard” (ZES), which plans to send $235 million in annual ratepayer subsidies to the plants (Roberts, 2016).

Although plans for FEJA funding were mentioned, there were very few details listed in the examined resources. In fact, according to the fiscal notes filed throughout SB2814’s lifespan in the House, the bill will basically pay for itself. For each House Floor Amendment addition

21 filed by Chief Sponsor Representative Rita (D), there was a corresponding “fiscal note” (see

Table 4) describing its fiscal impact. For the most part, these notes reassured legislators that

FEJA would have a minor impact on the state’s budget.

Table 4: SB2814’s Fiscal Impact Notes by Revision

Fiscal Note, House Floor SB 2814 (H-AM 3) will result in an estimated expenditure increase to the Amendment No. 3 (Illinois Illinois Power Agency Operations Fund of $1to 2 million in the first year, Power Agency) but that amount may decrease in subsequent years. These costs will be recovered by the Agency through fees collected by the Agency which will make this cost neutral to the Agency. The Bill will also increase ​ ​ expenditures from the Renewable Energy Resources Fund at levels to be determined at a later date through the development of a Long-term Renewable Resources Plan. Those expenditures will be supported by funds that have already been collected, or are anticipated to be collected.

Fiscal Note, House Floor SB 2814 (H-AM 4) does not materially change the Fiscal Impact addressed Amendment No. 4 (Illinois in the Fiscal Note provided for SB 2814 (H-AM 3) Power Agency)

Fiscal Note, House Floor This legislation ensures that revenues collected by the Public Utility Fund Amendment No. 5 (Illinois are sufficient to pay the expected expenditures as appropriated by the Commerce Commission) General Assembly. In recent years, the Public Utility Fund has not received ​ adequate revenues to afford necessary expenditures; therefore, the State has relied upon transfers of cash from other state funds in order to pay the approved expenses. There would be no additional workload on the State as a result of this Amendment. There is no fiscal impact on the State General ​ Revenue Fund; the fiscal impact on the state is to ensure that the Public Utility Fund is self-supporting by ensuring adequate revenues to pay expenses.

Fiscal Note, House Floor SB 2814 (H-AM 6) does not materially change the Fiscal Impact addressed Amendment No. 6 (Illinois in the Fiscal Note provided for SB 2814 (H-AM 3) Power Agency)

Fiscal Note, House Floor SB 2814 (H-AM 7) does not materially change the Fiscal Impact addressed Amendment No. 7 (Illinois in the Fiscal Note provided for SB 2814 (H-AM 3) Power Agency)

Source: Bill Status of SB2814. ​

22 Most of the fiscal impact information was provided in the first fiscal note for House Floor

Amendment No. 3, stating that Illinois Power Agency spending will increase by $1 to 2 million in the first year, and that the costs will be paid for through fees collected by the Agency — meaning there is a cost neutral effect on the Agency. The same fiscal plan is adopted for the

Public Utility Fund, and House Floor Amendment No. 5 reassures that “there is no fiscal impact on the State General Revenue Fund” (“Bill Status of SB2814”).

From the start, the bill’s supporters assured skeptical legislators of the minimal fiscal impact SB2814 would have on the state of Illinois. The bill’s revisions provide clear evidence of their kept promise. Despite these efforts to satisfy those worried about state spending, “fiscal impact” was still a reoccurring justification for voting ‘no’ to the bill. Specifically, Rep.

Morrison (R) stated: “to find that there’s no fiscal impact on the State or on the Correctional

Budget, on our local units of government, on state debt, frankly, it’s a farce” (99th General

Assembly, 2016a, p. 89). Several other Republican opposers repeated his concerns.

Analysis of Fiscal Impact

Overall, even though Chief Sponsor Rep. Rita (D) and other representatives working on the bill pursued a cost neutral solution, meaning Illinois would not be required to expend additional funds to support the bill’s programs, several opponents did not approve of the vague fiscal plan. FEJA’s controversial fiscal impact was one of the most abundant arguments against the bill, and resulted in several opponents asking their peers to vote ‘no’ due to the uncertainties.

23 Unlike the results with bipartisanship, Midwestern states may or may not have a better chance with replication when it comes to the bill’s fiscal plan — and it depends on whether they will need to include a nuclear bailout in their energy legislation. As discussed earlier, Exelon had two large nuclear power plants in Illinois on the edge of closure. In order to save the plant’s job market and economic activity, legislators devoted 30% of the bill’s total funding into saving

Exelon’s plants. These special circumstances resulted in one of FEJA’s most contentious sections — the nuclear power plant bailout — which received bipartisan pushback (see Table 1) and much of the focus on the opposing side. Thus, if Illinois’s surrounding states do not need a nuclear bailout, they will most likely have an easier time constructing a fiscal plan that supports expansive clean energy legislation using REC funding, rather than relying on residential rate increases and ratepayer subsidies. This would eliminate the concern on unknown rate increases for consumers, which was an abundant concern among dissenters. However, since most states do ​ need a nuclear bailout (i.e. Ohio), mixing comprehensive clean energy legislation with a bailout for nuclear power plants may not be the best plan for bipartisan passage, as it provoked significant pushback on both sides of the aisle.

Summary of Results

In conclusion, although SB2814 received bipartisan sponsorship in both chambers, the supporting side, primarily Democratic, and opposing side, primarily Republican, still heavily demonstrated partisanship. This conclusion was illustrated through vocal objectors and the final vote count, in relation to the total proportion of Democrats to Republican representatives. Thus,

24 Illinois experienced partisanship difficulties in the House and the Senate despite having a

Democratic supermajority, which makes replication in other Midwestern states less likely. Also, even though SB2814 had bipartisan support, it did not have to journey through bipartisan chambers. Since Illinois’s surrounding states rarely, if ever, have a dual Democratic legislature, passing expansive energy justice legislation could be challenging.

However, Illinois was under specific circumstances that caused contention on both sides of the aisle: a bailout for two nuclear power plants. The bailout caused numerous concerns for skeptical representatives, including the unknown impact on ratepayers, fiscal impact on the state, and simply being against a bailout. The bulk of the bill’s clean energy programs — specifically those that increase solar implementation in low-income and environmental justice communities

— were to be paid for through RECs, rather than residential rate increases. Therefore, without the nuclear bailout on the table, Midwestern states would have a much better chance of eliminating concerns of fiscal impact — specifically coming from the side of Republicans.

Yet, according to Rep. Rita (D) and the bailout’s supporters, a conversation with Exelon about its nuclear plants was important — which is exactly what Dolter and Boucher (2018) found in their research in Saskatchewan, Canada. Their results determined that discussing complex issues with stakeholders can be a crucial tool in successful policymaking, and FEJA policymakers acknowledged the importance of stakeholders through their meetings with not only

Exelon, but ComEd, Ameren, and environmental justice groups. Thus, this approach claims that conducting conferences, or “deliberative dialogue” (Dolter & Boucher, 2018), with energy stakeholders and community groups was important to Illinois’s clean energy legislation success.

25 Data Limitations and Future Research

One significant limitation of this research was its narrow scope: a single case study within a single state. In order to better determine how Midwestern states can implement low-income solar energy programs, it would be beneficial to not only research a state in the area

(i.e. Illinois), but also states throughout the country with similar legislation (i.e. California). By widening the scope, more valuable questions could be asked: what is the most favorable fiscal plan for an expansive clean energy bill? What are the trends in partisanship among the states, and what role does it play in the bill’s passage? Were the opposing arguments similar in each state?

Additionally, the Illinois General Assembly had no recorded data on the hearings with the significant actors in this case, like Exelon, ComEd, Ameren, and Little Village Environmental

Justice Organization, the group that heavily lobbied for the low-income and community solar programs. These game-changing actors and their explicit impact on the bill was unable to be investigated, due to lack of data and time constraints of this research. These groups and more could be included in future research of this case. Similarly, there were several instances where unexpected findings were recorded but could not be analyzed with just the legislative voting record. These perplexities in the results could be further examined using different methods that are not as restrictive as numerical data. Another area of potential research is examining the effectiveness of the low-income and community solar programs, and how residents and community organizations are handling the energy changes. This study would add a powerful look at the aftermath of this research.

26 Policy Implications

The success of the Future Energy Jobs Act of 2016 in Illinois suggests that comparable bills could be passed in surrounding Midwestern states, due to the shared energy market and geographical location. Policymakers might consider FEJA’s fiscal plan of utilizing funds collected from RPS compliance credits to build new solar energy projects, specifically small-scale and community projects in low-income and environmental justice communities.

Also, policymakers should be aware of the highly unfavorable nuclear power plant bailout provision, and acknowledge the challenges that come with implementing clean energy legislation during a crisis in the state energy market. Similarly, although some partisan arguments cannot be avoided, like the need to protect the free market and deregulation, a highly developed, cost neutral fiscal plan might be essential to limit the debate on state fiscal impact and pricey costs to ratepayers. This groundwork could curb economic skeptics and greatly aid the implementation of a sweeping, comprehensive clean energy bill.

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