UPDATED 1/25/24
CHICAGO (Capitol News Illinois)– Boston-based Nexamp, a major player in the solar energy industry, is joining the growing list of renewable technology companies that have expanded or relocated to Illinois in recent months.
On Monday, Nexamp announced its intention to spend $2 billion in Illinois, including building a second headquarters in downtown Chicago.
While Gov. JB Pritzker said the company isn’t receiving any direct state funding or new tax credits, its leadership was clear that state policy was a driving force in the decision.
Nexamp CEO Zaid Ashai on Monday said the company set up shop in the state in response to the 2016 Future Energy Jobs Act and expanded following the passage of the Climate and Equitable Jobs Act in 2021.
“Illinois is our fastest growing market,” Ashai said in a statement. “But the state is far more than just an attractive market for solar generation – for Nexamp, it’s a state which shares our vision of a more equitable energy future powered by a diverse, equitable, and skilled workforce.”
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Pritzker in recent months has made several announcements regarding renewable energy investments in Illinois. These include Gotion’s battery plant in Manteno, MicroLink Devices’ solar cell factory in Niles, Prysmian Group’s cable plant in Du Quoin, Manner Polymers’ new facility in Mount Vernon, and Wieland’s copper plants around the state.
“We are one of the nation’s fastest growing solar and green technology markets,” Pritzker said Monday.
All of these projects were announced in the past eight months and all came with incentive packages through the state’s Reimagining Energy and Vehicles Act, which passed in 2021 and has since been expanded. Altogether, those deals are worth just over $360 million in tax credits paid out over decades, in addition to millions of dollars’ worth of other state and local tax breaks.
Lion Electric, which did not receive a REV credit, also opened a large facility that will manufacture electric buses and other commercial vehicles this year in Joliet.
Problems with generation
The state’s economic agenda is closely tied with a broader climate policy goal: decarbonization. This goal is formalized in state law, which sets a target for transitioning the state away from reliance on fossil fuel-powered electricity generation.
State law currently says that by the 2025 delivery year, one-quarter of electricity purchased by the state should come from renewable sources. Goals laid out in CEJA are even more ambitious, upping that to 40 percent by 2030 and requiring the state’s energy production to be carbon-free by 2045.
But the Illinois Power Agency – which handles energy procurement for the state’s utilities – reports that the state is lagging behind its goals. The agency’s current-year goal is for 22 percent of its energy procurement to come from its renewable portfolio standard. That’s a collection of state programs through which the IPA purchases renewable energy. But IPA Acting Director Brian Granahan said that portfolio accounts for about 11 percent as of December.
Supply chain delays, construction timelines and ongoing interconnection delays create a “significant challenge” to meeting these goals, according to the agency’s current long-term plan, published in October.
In its fiscal year 2022 annual report, the agency reported that 18.6 percent of the state’s energy generation capacity came from renewables sources. That figure is calculated using a broader definition of renewable projects which was outlined in CEJA.
The federal Energy Information Administration, which uses a slightly different method to calculate its figures, reports that 15.4 percent of Illinois’ electricity generation came from renewables in October. That lags the state’s statutory goal for this year of 22 percent and behind the nation’s average renewable electricity generation of 22.3 percent.
The IPA is currently seeking approval for an updated long-term renewable energy plan from the Illinois Commerce Commission.
Utility crackdown
Pritzker made a key appointment last week to the ICC, which is the lead agency involved in carrying out many of the administration’s climate goals. The ICC regulates gas and electric utilities, among other things, and over the past 12 months has issued several decisions lessening the rate hikes requested by the utilities while exercising greater oversight.
One of the key figures in those decisions was ICC Chair Doug Scott, who advised the administration while it drafted CEJA and is now up for confirmation in the state Senate to oversee more of its implementation. Last summer, Pritzker appointed him to serve the last six months of outgoing chair Carrie Zalewski’s five-year term.
On Friday, Pritzker formally appointed Scott to a full term as ICC chair.
“We had, obviously, a lot of really big things happening, with all the rate cases at once and all the grid plans and rate plans coming at the same time,” Scott told Capitol News Illinois on Tuesday.
Scott said the busy schedule for the ICC will continue, as the agency still has work to do with Commonwealth Edison and Ameren Illinois after rejecting the utilities’ multi-year plans late last year.
This year, the commission will host a series of “future of gas” hearings aimed at spelling out the long-term plan for natural gas infrastructure as the state transitions away from the energy source.
Read more: Chicago utility pushes back against state oversight, asks for further rate increase
“If the decarbonization goals of CEJA are to be met, the gas distribution system as currently operated will need to change,” wrote the ICC’s commissioners in their controversial December decision in a rate case brought by the Chicago utility Peoples Gas.
Scott noted the commission is also working on implementing low-income rates for electric utility customers and continuing the renewable energy planning process with the Illinois Power Agency.
“A lot of it has to do with CEJA, but it’s not like it’s separated into different columns,” Scott said. “It’s all tied together.”
Consumer advocates have noted that Scott and the other four commissioners – all appointed by Pritzker – are noticeably more consumer friendly and focused on protecting the climate than previous boards.
Unions, meanwhile, took issue with the commission’s decision in the Peoples Gas case. Representatives of the statewide labor organization AFL-CIO and several local unions wrote letters to the board criticizing its decision to “pause” $265 million in utility infrastructure spending.
Pritzker, on Monday, defended his appointments, saying their recent decisions have been “great for clean energy” and “good for consumers.”
“I’m very pleased with the work they’ve been doing, and I look forward to them being confirmed by the state senate,” Pritzker said.
Commissioners Stacey Paradis and Conrad Reddick await Senate confirmation sometime this spring. Scott’s confirmation must come within 60 session days of his appointment, meaning his approval could be delayed past May.
Read more: State regulators once again flex muscle in rejecting utilities’ grid plans, lessening rate hikes
Editor’s note: A previous version of this story referenced outdated data for the state’s progress toward renewable energy goals. It has been corrected to reflect more recent procurements and to more accurately describe the state’s renewable portfolio standard. Capitol News Illinois regrets the error.
(Reporting by Andrew Adams, Capitol News Illinois)
Capitol News Illinois is a nonprofit, nonpartisan news service covering state government. It is distributed to hundreds of print and broadcast outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation, along with major contributions from the Illinois Broadcasters Foundation and Southern Illinois Editorial Association.
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