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Energy Incentive Programs, Illinois

Updated October 2008

Below you will find questions and answers regarding Illinois' utility energy efficiency programs, including options for load management, demand response, and distributed energy resources, and information about state-sponsored energy efficiency programs.

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What public-purpose-funded energy efficiency programs are available in my state?

Illinois' 1997 restructuring law provides a small amount of funding for energy-efficiency programs (approximately $3 million annually, statewide) through non-bypassable flat monthly charges on customer bills. The 10-year program, administered by the Illinois Department of Commerce and Economic Opportunity (DCEO), expired in 2007. This Energy Efficiency Trust Fund was renewed in 2007 for another eight years.

In response to the 2007 legislation creating the Energy Efficiency Portfolio Standard, the DCEO launched several new energy efficiency programs aimed at public sector consumers. These Public Sector Energy efficiency programs, started in June 2008, provide financial incentives specifically for qualified public sector projects in ComEd or Ameren service areas.

  • The Standard Incentive program provides grants (maximum $100,000) and rebates (maximum $10,000) for a variety of standard energy efficiency measure, including improved efficiency lighting, motors, VFDs, and cooling equipment. Grants cover up to 50% of total project cost, and 100% of incremental cost of efficiency measures.

  • The Custom Incentive program provides incentives of $0.07/kWh for qualifying energy saving measures with a payback of 1-7 years.

  • The New Construction program offers $0.20 to $1.00/square foot grants for new buildings with total building performance that achieve levels of energy efficiency beyond code by 10 to 30%. For individual building components, incentives are $0.05/kWh saved. Total incentives can cover up to 50% of total project cost, and 100% of incremental cost.

  • The Retro-commissioning program offers funds for identifying and implementing low-cost energy efficiency improvements, primarily for HVAC and building controls, in existing buildings.

In addition, the DCEO helps to sponsor the Smart Energy Design Assistance Center that offers free technical assistance to those planning energy efficiency improvements to existing buildings or incorporating energy saving measures in new buildings. Assistance is available from the initial energy audit (existing buildings) or design phase (new construction) all the way through implementation.

For larger customers (annual energy cost exceeding $500,000), the DCEO offers the Large-customer Energy Analysis Program (LEAP) that provides technical assistance in developing and evaluating energy efficiency potential. Called the "One 2 Five" approach, this program offers customers a diagnostic session for little or no cost, an energy plan and support implementation of the plan. DCEO provides rebates of 50% (up to $10,000) of the cost for customers who choose to develop an energy plan and implement it. Customers typically experience a 10 to 30% reduction in energy consumption. DCEO also sponsors occasional Sustainable Energy Workshops.

As part of the restructuring settlement approved by the state legislature, Commonwealth Edison (ComEd) agreed to allocate $225 million (on a one-time basis) to a Clean Energy Trust Fund in order to support environmental initiatives, energy-efficiency programs, and renewable energy projects. The trust fund is administered by the Illinois Clean Energy Community Foundation. Energy efficiency grants are available through the foundation, although these funds are primarily targeted toward local, hard-to-reach market segments. The grant programs involve an annual or semi-annual submission process.

What utility energy efficiency programs are available to me?

Though its Smart Ideas initiative, ComEd offers a variety of energy efficiency programs.

  • Prescriptive incentives are available to business customers for efficient lighting, refrigeration, HVAC units, motors, and some custom upgrades. Funds are available on a first-come, first-served basis.

  • Custom incentives (PDF 312 KB) are also available for improvements in system efficiency resulting in permanently reduced consumption. Projects with a five-year life or less or an energy management control system installation may be eligible for an incentive of $0.03/kWh saved (maximum payback period of five years). Projects with a life longer than five years can be eligible for an incentive of $0.07/kWh; payback period must be longer than one year and less than seven. Incentives are limited to 100% of incremental cost or 50% of total project, and are capped at $100,000 per year per facility.

Ameren Energy offers its business customers a variety of incentives through its Act On Energy program. Standard incentives include cash back for efficient lighting, HVAC, refrigeration and motor installation. More complex projects aimed at improving efficiency of VFDs, compressed air systems, and other processes can qualify for custom incentives. Custom incentives are based on $0.05/kWh per annual kWh savings and are limited to 50% of incremental project cost (maximum of $100,000), and the project must have a 1.5 to 7 year payback.

What load management/demand response options are available to me?

The PJM Interconnection (PJM), a regional transmission organization (RTO), offers two demand response programs.

  • The Emergency Load Response Program provides participants with a payment representing the marginal cost of power at the nearest hub on the PJM system (the locational marginal price, or "LMP") or $0.50/kWh, whichever is greater, for providing load reductions when notified by PJM of a system emergency. Compliance with any load reduction request is voluntary; no penalties are assessed if a participant decides not to provide a load reduction. Retail electricity customers may participate through any PJM Member (for example, their electricity provider) or directly, by registering as a Special Member with PJM.

  • The Economic Load Response Program allows electricity users to provide load reductions in exchange for a payment based on hourly wholesale electricity prices. As with the PJM emergency program, participation is fully voluntary. Program participants have the choice of two options: the Day-Ahead or Real-Time Option. In the Day-Ahead Option, participants submit load reduction bids (of at least 100 kW) into the day-ahead energy market. Participants whose bids are accepted are paid for their load reductions based upon the day-ahead, hourly electricity market prices. In the Real-Time Option, participants can decide at any time to provide load curtailments (with one hour notice to PJM), and receive payment based on the real-time electricity price. Retail electricity customers can participate in the program through any existing PJM Member, such as their utility, a third-party electricity supplier, or a specialty "curtailment service provider" (CSP). Regardless of which type of firm it is, the CSP will generally offer to split the revenues with the customer at a pre-determined percentage.

In both the emergency and economic programs, participants can provide load reductions either through curtailing electricity use or operating on-site generation.

ComEd's Smart Returns Program provides a variety of load reduction opportunities:

  • The Voluntary Load Response Program (PDF 161 KB) pays customers for responding to individual load reduction requests with at least one hour notice. Participants are notified of the payment level in advance of each event and are guaranteed at least $0.25 per kWh for their reduced usage. The program is open to any customer in ComEd's service territory, although electricity customers of ComEd are eligible for greater incentives. To participate, a customer must be able to curtail at least 10 kW of peak load.

  • The Energy Cooperative Program (Rider 32) (PDF 91 KB) pays participants to provide load curtailments with at least one hour notice by ComEd, for up to 120 hours per year. In exchange, the participant is paid approximately $35/kW at the end of the year, based on the average load reduction. ComEd will provide energy management software free of charge. Participants must be a Rate 6L customer and commit to a five year contract.

  • The Early Advantage Program (PDF 105 KB) is designed for customers who require more flexibility in the amount of advance notice, but who can provide load curtailments of at least 1 MW per event. The incentive level depends upon the program terms required by the participant.

  • The Alliance Program (Rider 30) (PDF 93 KB) is an interruptible program that provides customers with bill credits in exchange for committing to reduce to a firm power level at the request of ComEd.

  • The Capacity Based Load Response Rider (PDF 186 KB) allows customers to bid and receive payment for load reductions. Customers must commit to at least 100 kW per load response request, and can choose from two payment schedules and two notification periods (30 or 90 minutes). Non-compliance penalties are charged for not responding to a load reduction request between June 1 and September 30.

Ameren runs the Customer Energy Exchange program, which offers credit to commercial and industrial customers for voluntary reductions during peak hours. Credits range from $0.10-$1.20 per kWh reduced. To qualify for this program, customers must be able to reduce their load by at least 500 kW, and also must have an interval meter and a computer with a fax machine and internet access.

What distributed energy resource options are available to me?

The Database of State Incentives for Renewable Energy (DSIRE) website provides information on programs in Illinois that offer incentives for renewable distributed generation. These programs may be of interest to federal customers:

The Illinois Department of Commerce and Economic Opportunity offers both rebates and grants at various times to eligible customers via the Clean Energy Program. Currently, the following programs are being offered:

  • The Solar Energy Rebate Program provides 30% of cost (up to $10,000) for qualified solar installations.

  • The Solar Energy Incentive Program provides grants for a variety of solar projects. For qualifying solar thermal project, grants equaling 30% of costs (up to $250,000) are available. For solar photovoltaic systems that are a part of a LEED-silver or better facility, grants can provide up to $3.00 per watt, up to $250,000. Grants for innovative solar photovoltaic systems cover $3.23 per watt, up to $250,000.

The Renewable Energy Resources Trust Fund targets solar photovoltaic in conjunction with high LEED rating for a facility, community-based wind projects, solar thermal, biomass, and fuel cell or other emerging renewables projects.

Are there energy efficiency programs sponsored by state government?

For information on energy efficiency programs offered by the state, see the section on public purpose programs (above).

What additional opportunities are available to me?

Federal customers also have opportunities to pursue energy-efficiency projects with utilities (such as Ameren, ComEd, MidAmerican, Peoples Energy (North Shore Gas), and The People's Gas Light & Company) that have area-wide contracts with GSA and, by extension, all other federal agencies. Federal facilities should contact their account executive to determine the level of each utility's participation.

NOTE: Energy efficiency funds and demand response programs are updated at least annually. Please contact the FEMP webmaster if changes are needed between updates.