Manufacturers Warn Energy Proposal Will Result in Large Electric Rate Hikes for Businesses and Consumers
Illinois needs safe, reliable and affordable energy
SPRINGFIELD – The Illinois Manufacturers’ Association warns energy legislation under consideration by the General Assembly during the fall veto session is deeply flawed and will result in massive electric rate hikes on businesses and consumers.
This comes as ratepayers are already struggling from high electricity costs caused by growing energy demand that comes at the same time policies are forcing the closure of baseload generation sources. Notably, lawmakers are asking consumers to pay more for electricity without addressing underlying capacity and supply issues that have put Illinois on a path to see energy shortfalls as soon as 2030, which could lead to service disruptions such as brownouts and blackouts.
Under the latest proposal, businesses and families would be saddled with an estimated $7 billion in new charges on electricity bills to pay for battery storage projects. While manufacturers support battery storage as part of an all-of-the-above energy marketplace which includes keeping current plants in operation, adding new power generation and investing in more transmission lines, Illinois consumers should not be required to directly bear the massive cost of these investments. Further, battery storage alone does not solve the primary problem of insufficient electric generating capacity to meet current and anticipated demands for electricity.
Manufacturers consume large amounts of energy to produce goods vital to everyday life, including food, pharmaceuticals, machinery and household goods. Changes in affordability and reliability of energy deeply impact manufacturing operations and can determine whether companies are able to increase investments and jobs.
A cost analysis of the impact on manufacturers found that under this plan, a small food processor using 1,400KW of energy will see a monthly rate increase of $1,466 in the first year, which will grow to an increase of $12,084 in 2045 – a $144,000 annual increase. A large auto manufacturer using 10,100KW will see a first-year monthly rate increase of $11,361, which rises to a monthly increase of $87,276 per month in 2045 – a hike of $1,047,312 each year.
“Illinois manufacturers already pay some of the highest electricity rates in the Midwest. Increasing the costs of energy will put our manufacturers at a competitive disadvantage compared to neighboring states and make it far more difficult to attract new investment to the Land of Lincoln,” said Mark Denzler, president and CEO of the Illinois Manufacturers’ Association. “While we appreciate the hard work of the legislators negotiating this complex policy issue, further changes are needed to ensure ratepayers aren’t stuck with even higher electric bills. Illinois families and businesses need safe, reliable and affordable energy.”
Under the legislation, the Illinois Power Agency would be responsible for procuring battery storage credits or contracts, while utility companies would be authorized to recover storage-related costs through volumetric charges on customer bills. This means that regardless of how much energy a customer uses, a portion of their bill would go toward funding new storage projects.
Meanwhile, documents previously released by the Illinois Commerce Commission (ICC), Illinois Environmental Protection Agency (IEPA) and the Illinois Power Agency (IPA) show that PJM and MISO, the two regional grid operators for Illinois, need an additional 31 to 46 gigawatts of generation to avoid an energy shortfall – which this proposal does not achieve.
Illinois was scheduled to release a study detailing the adequacy of the state’s energy resources on December 15, 2025, but the new proposal will push that deadline back to June 1, 2026. However, documents recently released by state regulators raise concerns about over-reliance on renewable energy sources and battery storage, noting “the reliability value of variable and dispatch-limited resources diminish at high penetrations” and have declining value because generation output is “dependent on weather conditions and cannot be turned on (dispatched) at any time.” They also note that “storage has declining value due to a limited ability to generate over sustained periods.”
A better way to responsibly advance battery storage is to allow the Illinois Finance Authority to use its tools to finance large infrastructure projects through bonding, low-interest loans, and public-private partnerships. Similar private sector financing programs are being used in Texas, which has the fastest growing battery storage program in the country.
Manufacturers are also opposed to new Integrated Resource Planning provisions that would shift too much decision-making authority from the legislature to state agencies, particularly the ICC. State agencies should not be given the power to raise costs on consumers without rate caps and strong legislative oversight, both of which are lacking from the current proposal.
The IMA continues to support efforts to lift the moratorium on nuclear facilities over 300 megawatts and remains committed to working with lawmakers and stakeholders to craft comprehensive energy policies that prioritize the need for reliable, affordable and safe energy production while advancing a balanced and fair regulatory environment.
