Illinois

Illinois

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Select Economic and Energy Data Value State Rank
Real Gross Domestic Product, per capita $40,006 13th highest
Unemployment 11.4% 7th highest
Gasoline Price, per gallon $2.93 8th highest
Electricity Price, per kWh 9.13¢ 21st highest

Illinois has average electricity prices. Coal and nuclear each provide over 45 percent of the state’s electricity production. Natural gas and wind contribute minimally to Illinois’ electricity production. With eleven reactors at six nuclear power plants, Illinois is the nation’s top nuclear generator and provides more than one-tenth of the country’s total nuclear power.

Illinois has substantial fossil fuel resources, ranking third among the states in estimated recoverable coal reserves and possessing more than one-tenth of the nation’s total. More than half of the state’s coal is delivered to other states, while Illinois also imports coal from Wyoming. Illinois leads the Midwest in oil refining capacity. The state also plays a crucial role as a transportation hub for oil and natural gas moving throughout North America. Illinois is a leading ethanol producer, ranking second to Iowa.

Regulatory Impediments to Affordable Energy

Although affordable energy is a vital component of a healthy economy, regulations frequently increase energy costs. Regulations imposed in the name of reducing carbon dioxide and greenhouse gas emissions are especially costly. Carbon dioxide is a natural byproduct of the combustion of all carbon-containing fuels, such as natural gas, petroleum, coal, wood, and other organic materials. Today, there is no cost-effective way to capture the carbon dioxide output of the combustion of these fuels, so any regulations that limit carbon dioxide emissions will either limit the use of natural gas, petroleum, and coal, or dramatically increase their prices.

Below are some facts about Illinois’ regulatory environment that are likely to affect the cost of energy or the cost of using energy. One of the reasons that Illinois energy prices are moderately high is because of the regulations that Illinois has implemented.

  • Illinois does not cap greenhouse gas emissions. However, in 2007, former Governor Rod Blagojevich announced non-binding greenhouse gas emissions targets of 1990 levels by 2020 and 60 percent below 1990 levels by 2050.[i]
  • Illinois is a member of the Midwestern Regional Greenhouse Gas Reduction Accord, a regional agreement among six American governors and one Canadian premier to target greenhouse gas reductions. The central component of this agreement is the eventual enactment of a cap-and-trade scheme, perhaps supported by low-carbon fuel standards and other supplemental policies.
  • Illinois requires utilities to sell a certain percentage of electricity from renewable sources. The state’s renewable portfolio standard requires utilities to provide 10 percent of electricity sold to be from renewables by June 1, 2015, and 25 percent by June 1, 2025.[ii]
    • Illinois requires utilities to meet a portion of electricity demand with energy efficiency. Utilities must implement energy efficiency measures to meet 0.2 percent of delivered electricity in 2008 and 2 percent in 2015 and beyond.[iii]
  • Illinois does not require gasoline to be mixed with renewable fuels. However, the St. Louis metropolitan area and the Chicago metropolitan areas are required to use specially formulated motor gasoline which includes ethanol.[iv]
  • Illinois does not impose automobile fuel economy standards similar to California’s, which include attempts to regulate greenhouse gas emissions from new vehicles.
  • Illinois requires new residential and commercial buildings to meet energy efficiency standards. Residential and commercial buildings must comply with the 2009 International Energy Conservation Code (IECC). Commercial buildings must also comply with ASHRAE 90.1-2007.[v] The IECC (developed by the International Code Council) and ASHRAE (developed by the American Society of Heating and Refrigeration and Air Conditioning Engineers) are model codes that mandate certain energy efficiency standards. State buildings must also meet energy efficiency standards. New buildings and major renovations smaller than 10,000 square feet must meet the highest practical LEED standard, while new buildings and major renovations larger than 10,000 feet must meet at least the silver LEED standard.[vi] There are several levels of standards in the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) rating system.
  • Illinois does not impose state-based appliance efficiency standards. However, new equipment purchased by executive branch agencies must be Energy Star certified.
  • Illinois does not allow electric utilities to “decouple” revenue from the sale of electricity but does allow gas utilities to decouple revenue from the sale of natural gas. Some states decouple electricity revenue from actual sales, allowing utilities to increase their revenue by selling less electricity and natural gas.

Data Sources: Real GDP per capita 2008: Bureau of Economic Analysis, News Release: GDP by State (June 2, 2009), http://www.bea.gov/newsreleases/regional/gdp_ state/gsp_newsrelease.htm; Unemployment: Bureau of Labor Statistics, Regional and State Employment and Unemployment–February 2010 (Mar. 10, 2010); Gasoline Prices: American Automobile Association, AAA Daily Fuel Gauge Report (Mar. 30, 2010); Electricity Prices: Energy Information Administration, Electric Power Monthly, Table 5.6.B., Average Retail Price of Electricity,  (March 15, 2010), http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_b.html; Electricity Generation Data: Energy Information Administration, Electricity Generation 2009, http://www.eia.doe.gov/cneaf/electricity/epa/generation_state_mon.xls.

[i] Illinois Governor’s Office, press release: Gov. Blagojevich sets goal to dramatically reduce greenhouse gas emissions in Illinois, http://illinois.gov/PressReleases/ShowPressRelease.cfm?SubjectID=2&RecNum=5715.

[ii] Lawrence Berkeley National Laboratory, Renewables Portfolio Standards in the United States, http://eetd.lbl.gov/ea/ems/reports/lbnl-154e.pdf.

[iii] Public Act 095-0481 (Ill. 2007), http:/www.ilga.gov/legislation/publicacts/95/PDF/095-0481.pdf.

[iv] Energy Information Administration, Illinois, Apr. 1, 2010, http://tonto.eia.doe.gov/state/state_energy_profiles.cfm?sid=IL.

[v] Building Codes Assistance Project, Code Status: Illinois, http://bcap-energy.org/node/66.

[vi] Illinois Capital Development Board, Green Building Resources and Energy Efficiency, http://www.cdb.state.il.us/green_initiatives.shtml.