FACT SHEET ON
THE LOW CARBON PORTFOLIO STANDARD
W H AT YOU NEED TO KNOW
Illinois’ opportunity to secure a low-carbon energy future has arrived. The Low Carbon
Portfolio Standard (LCPS) will preserve the state’s existing low carbon energy sources
and advance Illinois’ position as a clean energy leader. The LCPS would make Illinois a
national leader with the highest requirement of low carbon energy in the nation.
WHAT IS A LOW CARBON
PORTFOLIO STANDARD?
HOW DOES A LOW CARBON
PORTFOLIO STANDARD WORK?
The LCPS would require all Illinois electric utilities
to purchase a specified percentage of low carbon energy
credits from energy sources that emit zero or low
amounts of carbon dioxide. Low carbon energy sources
include wind, solar, hydro, tidal, wave, clean coal, and
nuclear. The LCPS is technology neutral, so all generators
of zero or low carbon energy would be able to compete
in the procurement process.
Beginning in 2016, the LCPS would require Illinois’ electric
utilities to obtain low carbon energy credits to match
an amount equal to 70% of the electricity used on the
distribution system. The electric utilities would rely upon
the Illinois Power Agency to develop an open, transparent,
and competitive process to obtain low carbon energy
credits. Costs associated with purchasing the low
carbon energy credits would be collected from all retail
customers. Just like Illinois’ Renewable Portfolio Standard
(RPS), the LCPS is a requirement that only applies to
electric utilities that serve more than 100,000 customers,
notably ComEd and Ameren. The LCPS does not apply
to smaller electric utilities, electric cooperatives, or
municipal electric utilities.
The LCPS is one of the market-based solutions identified
in the HR 1146 Report issued by the Illinois Commerce
Commission, Illinois Environment Protection Agency,
Illinois Power Agency, and the Department of Commerce
and Economic Opportunity to position the State of Illinois
to meet future energy and environmental goals, which
includes preventing the early retirement of certain Illinois
nuclear power plants.
WHY IS IT NEEDED, AND WHY NOW?
New rules proposed by the Environmental Protection Agency (EPA) call for reductions in carbon emissions from existing
power plants and encourage states, including Illinois, to adopt policies to discourage the loss of existing nuclear plants
because of their environmental benefits. The closure of Illinois’ nuclear facilities will result in significant increases in carbon
and other pollutants and will make it difficult for Illinois to comply with these new rules.
The LCPS in Illinois would act, at a minimum, as a bridge solution that would facilitate
further policy actions that may be required for compliance with EPA rules by the State of
Illinois. As a result, the LCPS would sunset on the later of December 31, 2021, or the effective
date of the implementation of Illinois’ adoption of a market-based program to reduce carbon
emissions pursuant to Section 111(d) of the federal Clean Air Act.
THE BENEFITS TO ILLINOIS
The LCPS is part of an all-of-the-above energy strategy that will help reduce carbon emissions
and deliver benefits for the entire state. Here are the key benefits of establishing the LCPS:
AN INCREASE IN RENEWABLE ENERGY WHILE MAINTAINING EXISTING
LOW- CARBON SOURCES OF ENERGY SUCH AS NUCLE AR POWER .
• Under the proposal, electric utilities would
• Up until now, nuclear energy facilities, which
be required to purchase low carbon energy
provide 90% of Illinois’ carbon free power, have
credits in an amount equal to 70% of the
not been valued for the carbon free electricity
electricity used on its transmission and
they generate. The Low Carbon Portfolio
distribution system.
Standard corrects this flaw in Illinois’ energy
policy and helps preserve these facilities, some
of which are at risk of premature closure.
A COST-EFFECTI VE AND MARKET-BASED SOLUTION W ITH STRONG
CONSUMER PROTECTIONS.
• The LCPS is technology-neutral and rewards
all low carbon resources equally within a
competitive market framework.
• The legislation includes consumer protections
such as a price cap to limit the consumer impact
• The legislation also includes a separate
customer rebate provision that would provide
a direct bill credit to customers in the event
wholesale prices exceed a specified level. This
type of customer protection does not exist
under other clean energy programs.
to a 2.015% annual increase over 2009 retail
prices, or about $2 per month for the average
Illinois residential electricity customer (less than
would occur if some of Illinois’ nuclear plants
were to close early)
A BRIDGE TO COMPLY W ITH THE U. S. EPA’S CLEAN POWER PL AN.
• The LCPS will help maintain existing sources
• The legislation includes a provision that the
of low carbon energy while Illinois determines
program will sunset on the later of Dec. 31, 2021,
how best to meet the EPA’s ambitious goal of
or once Illinois has implemented a compliance
reducing carbon emissions from power plants by
program pursuant to Section 111(d) of the
30 percent from 2005 levels by the year 2030.
federal Clean Air Act.
The Low Carbon Portfolio Standard is good for Illinois consumers, our
economy, our environment, and the reliability of our electric system.