Dive Brief:
- The Illinois Commerce Commission approved the Illinois Power Agency’s 2026 Long-Term Renewable Resources Procurement Plan last week, finalizing new contract-level provisions like surety bonds and a new process for the use of regulatorily continuing provisions for renewable energy certificate contracts.
- The provisions in the 2026 plan respond to uncertainty around renewable energy after federal implementation of new policy like the One Big Beautiful Bill Act signed in July, which curtailed the clean energy tax credits in the Inflation Reduction Act, including the investment tax credit.
- “But largely, [the IPA] did not blame or use that as a sole basis for any kind of changes to the long-term plan,” said John Albers, a director with Advanced Energy United. “There's definitely still a market for large community solar and utility-scale projects in Illinois.”
Dive Insight:
Albers said he didn’t think the OBBBA would have led to a decline in solar projects in Illinois anyway, but the newly-approved plan should help secure support for them.
“Certainly the long-term plan has provisions in it that will make those projects even more favorable, or more tolerable to financial institutions that are financing them,” he said.
One of those provisions, which the ICC approved, is a new mechanism for buyers and sellers to invoke the regulatorily continuing provision for RECs and petition the ICC “to consider non-price-related contract amendments that would bring the product or instrument into compliance” with legal or regulatory changes that emerge over the life of a contract.
Albers said he anticipates this provision will make financial institutions more comfortable with REC contracts “simply because there is an avenue for revising the contract if something changes at the state, federal, even local level, for that matter, that might affect the viability of the contract for that particular project.”
“What that boils down to is, if the regulations in place change after you enter into a contract, either the buyer or the seller of the renewable energy credits — with the buyer as the utility and the seller as the developer — can come before the commission and ask for any non-price related changes to the contract to reflect any changes in laws or regulations that would impact the contract terms,” he said.
Advanced Energy United, which was involved in the public feedback process for the plan, “supported that — in large part, because of what happened last July at the federal level,” Albers said. “We also advocated for the use of surety bonds, in addition to what the IPA has traditionally accepted, in terms of demonstrating the ability to follow through with the contract. Utilities weren't comfortable with that, but we supported the IPA’s proposal, and the commission again approved that as well.”
One of those utilities, Ameren Illinois, said in Sept. 2025 comments that in comparison to letters of credit, or cash, “surety bonds offer less overall security and present unique obstacles and risks that could require more time and resources from [Ameren] in the payment collection process. The primary reason for this is that surety bonds necessitate a claim investigation upon demand for payment.”
Ameren also objected to the changes to the regulatorily continuing provision, saying it knows the provision poses financing challenges to developers but that the utility prefers to continue dealing with this on a case-by-case basis in individual contract negotiations, “as opposed to making wholesale changes to the baseline contract or related processes in this proceeding.”
Looming budget concerns
The passage of the OBBBA led to an emergency reopening of the docket for the 2024 plan, and “substantially increases program and procurement activity across the 2025-26 program year, when ITC achievement likelihood is greatest,” the 2026 plan said. However, the fix will “substantially exacerbate upcoming RPS budget stress,” and the IPA predicts a budget shortfall “in the 2027-28, three years prior to the RPS Target year of 2030-31.”
In its final order regarding the plan, the ICC approved the IPA’s proposal to address the budget shortfall using legacy alternative compliance payments, or ACPs, that were paid to utilities by electricity suppliers who failed to meet renewable portfolio standard mandates.
The ACP funds across Ameren, Commonwealth Edison and MidAmerican Energy total $110 million. Ameren, which holds $36 million in these funds, noted concerns in their 2025 comments about risks from “rolling the ACP funds over directly into the budget, rather than being a reserve fund to cover contracts once a deficit has been reached and contracts suspended or reduced.”
This “may lead the IPA to delay such suspension of new REC procurements, which would then require utilities to front payment for these agreements which would negatively impact ratepayers because the utilities would be entitled to recover any capital spent to cover the procurements with interest,” Ameren argued.
Albers said Advanced Energy United likes the idea of rolling over ACP funds, “and the Commission approved it, because it will, at a minimum, forestall any budget concerns that the IPA raises — or at least identifies, year to year, in terms of how much money they can they expect to bring in to help pay for the renewable energy credits when they're offered.”
