Energy Efficiency Trust Fund

Illinois's 1997 electric-industry restructuring legislation created separate public benefits funds that support renewable energy and residential energy efficiency. The efficiency fund is known as the Energy Efficiency Trust Fund. Electric utilities and alternative retail electric suppliers contribute annually a pro rata share of a total amount of $3 million based on the number of kilowatt-hours sold during the previous year. The funding mechanism was established for 10 years in January 1998 and was renewed until December 12, 2015 in August 2007.

Additional funds may be accumulated through non-compliance fees as part of the Energy Efficiency Portfolio Standard (EEPS). For both natural gas and electric utilities, failure to submit an energy reduction plan will result in a fine of $100,000 for each day until the plan is filed. This penalty is deposited in the Energy Efficiency Trust Fund and may not be recovered by rate payers. Plans are due on September 1 every three years. If an electric utility fails to comply with its plan after 2 years, it must make a contribution to the Low-Income Home Energy Assistance Program (LIHEAP). Large utilities (those with more than 2,000,000 customers on December 31, 2005) must contribute $665,000, and medium utilities (those with between 100,000 and 2,000,000 customers) must contribute $335,000. Utilities that fail to meet their plans again after the third year must make another contribution to the fund ($665,000 for large utilities and $335,000 for medium utilities). For natural gas utilities that fail to meet their efficiency plans after three years, large utilities (those with more than 1,500,000 customers on December 31, 2008) must pay $600,000 into LIHEAP, medium utilities (those with 500,000-1,500,000 customers on December 31, 2008) must pay $400,000, and small utilities (those with 100,000-500,000 customers on December 31, 2008) must pay $200,000.

The Energy Efficiency Trust Fund is administered by the Illinois Department of Commerce and Economic Opportunity (DCEO), which is authorized to determine how funds are used. Projects eligible for funding include energy-efficiency upgrades for low-income residents, new construction and building retrofits, window upgrades, appliance upgrades, lighting upgrades, insulation and other efficiency measures approved by the DCEO. Currently, the Energy Efficiency Trust Fund supports the Illinois Energy Efficient Affordable Housing Construction Program, which provides funding to not-for-profits to support energy efficiency in low-income housing (both new construction and retrofits) as well as several other energy efficiency initiatives. For details regarding the Energy Efficiency Trust Fund's programs and projects funded, see the 2011 Annual Report.

Separately, the DCEO also administers programs mandated through Illinois' EEPS. This fund, created in July 2012, is known as the Energy Efficient Portfolio Standards Fund and is used to administer programs that must meet 25% of the EEPS. Funds are collected by the utilities and transferred to the DCEO. Programs funded through this source began in 2008 through the DCEO Energy Projects Fund; however, the DCEO did not have authority to hold the funds. The 2012 Fiscal Year Budget contained a $95,000,000 appropriate for the Energy Efficiency Portfolio Standards Fund.

In June 1999, Illinois and ComEd reached a settlement as part of the state's approval of ComEd's merger with PECO Energy. Through a one-time payment by ComEd the settlement created a $250 million fund to support renewable energy and energy efficiency and to preserve and enhance natural areas and wildlife habitats throughout the state. This fund, known as the Illinois Clean Energy Community Trust (CECT) is administered by the Illinois Clean Energy Community Foundation. Of the $250 million, approximately $200 million - $225 million is allocated to energy-efficiency projects, renewable-energy projects and wildlife-habitation projects, while at least $25 million is allocated to "clean" coal projects.