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Illinois Manufacturers Detail Impact of Rising Electricity Costs, Propose Ideas to Ease Pressure on Businesses and Families

FOR IMMEDIATE RELEASE
May 26, 2022

Illinois Manufacturers Detail Impact of Rising Electricity Costs, Propose Ideas to Ease Pressure on Businesses and Families

SPRINGFIELD – The Illinois Manufacturers’ Association testified before a joint hearing of House Public Utilities and Energy & Environment Committees today regarding the impact rising energy costs will have on manufacturers and to propose ideas to help ease the pressure.

Manufacturers use one-third of all energy consumed in the United States to produce vital products including food, medicine, furniture and electronics. It is estimated families in central and southern Illinois will soon be paying an extra $626 a year in electricity costs, while manufacturers will likely pay anywhere from tens of thousands of dollars to millions of dollars more in higher electric costs. These added costs come amid rising inflation and a global supply chain crisis already challenging the state’s manufacturing industry. On top of higher costs, concerns about adequate energy supply have led to warnings of potential brownouts this summer, which may force manufacturers to close during peak demand times.

“While it may be too late to prevent higher costs and brownouts this summer, action must be taken now to mitigate ongoing pain for Illinois manufacturers and families already struggling to make ends meet due to rising inflation and economic uncertainty caused by the pandemic,” said Mark Denzler, President and CEO of the Illinois Manufacturers’ Association. “Illinois policy makers can no longer ignore warnings about rising energy costs and decreasing reliability as renewable energy resources fall short of making up for capacity lost as fossil fuel power plants are eliminated. As lawmakers were told today by electric grid operators, capacity pressures are expected to get worse before they get better.”

To address these issues, the IMA suggests the following:

  • The General Assembly should require the Auditor General to conduct an immediate audit of Illinois’ Renewable Portfolio Standard to understand why the state has routinely failed to meet its goals. Created in 2007, the first goal was set at 20 percent renewables by 2020, and later amended in 2016 to 25 percent by 2025, and again was changed last year to 40 percent by 2030. As it stands, renewables make up less than 10 percent of the state’s energy supply. After spending billions of dollars, Illinois should be better positioned.
  • The state should immediately task the Illinois Commerce Commission with the creation of a Resource Adequacy Plan to better understand where we stand and where we are headed. This commission should gather generators, utilities, the business community, and other stakeholders to explore our baseload capacity need and supply. This is important because Illinois will have shed 6,910 MW of electricity between 2011 and the end of 2022. This capacity has not been replaced, and MISO grid operators have testified they expect to lose one-third of their baseload capacity in the next two years. Illinois cannot make informed energy policy decisions unless we have a clear vision of the issue.
  • Some steps may be possible to ease the immediate pain. This includes amending the Clean Energy Jobs Act to redirect the $180 million in Energy Transition Funds to offer rebates to customers to offset these higher costs. These funds should be provided to all customers – residential, commercial, and industrial based on their pro-rated share of the higher costs.
  • Illinois has four plants scheduled to close in 2022 – two in June and two in December. While MISO does not have the ability to require these plants to remain operational, Illinois should work with the operators, FERC, and others to encourage these plants to remain open and approve new gas plant operations such as the one proposed in Pawnee to help ease energy supply concerns.

Manufacturers are leading the way in finding innovative ways to harness energy, with pioneering companies developing new technologies that make energy more affordable, reliable, and cleaner with every passing year. Over the last decade, the nation’s manufacturing sector has reduced emissions by 21 percent while increasing economic output by 18 percent. But manufacturers, our communities and Illinois families need stability and certainty moving forward. The manufacturing industry stands ready to work with policy makers to find solutions.

About the Illinois Manufacturers’ Association (IMA)

The Illinois Manufacturers’ Association is the only statewide association dedicated exclusively to advocating, promoting, and strengthening the manufacturing sector in Illinois. The IMA is the oldest and largest state manufacturing trade association in the United States, representing nearly 4,000 companies and facilities. For more information, please visit http://ima-net.org/.

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