Energy Efficiency Standards
Electricity
Illinois has long been a regional leader in electric energy efficiency spending and savings. Since investor-owned utilities began running energy efficiency programs in 2007, the state’s energy efficiency framework has been modified and enhanced several times, starting with the Future Energy Jobs Act (2016), then the Climate and Equitable Jobs Act (2021) and finally with the Clean and Reliable Grid Affordability Act (2025).
The Clean and Reliable Grid Affordability Act (CRGA) passed in October 2025 and significantly amended Illinois Energy Efficiency Resource Standard contained within Public Utilities Act. The law replaces the cumulative persistent annual savings (CPAS) targets with an annual savings goal equivalent to 2% of the utility’s average annual electricity sales from 2021 through 2023. ComEd will need to achieve the new 2% savings goal starting in 2027 and Ameren will ramp up to 2% by 2029.
Under CRGA utilities can claim electric EE savings from electrification programs as well as gas therm savings from programs administered jointly with gas utilities. ComEd may count up to 30% of electric EE savings from converted gas therms and up to 20% from electrification programs. Ameren can count up to 20% of electric savings from converted gas therms and up to 20% from electrification.
Utility EE budget limits are set in legislation in Illinois, with ComEd allowed to spend up to 4.25% of annual revenue towards EE with allowable increases to account for inflation post 2029. Ameren is currently allowed to spend up to 4.21% increasing to 6.06% by 2029, also with allowable increases to account for inflation. Both utilities must spend at least 25% of their EE budgets on income-qualified programs and have the option of having their savings goal reduced by 0.025% for every 1% increase over the 25% minimum. The maximum allowable reduction in goal is 0.25% should the utility spend 35% of its EE budget towards income qualified programs. In addition to the spending requirement CRGA mandates that 80% of income qualified program spending must be on whole building weatherization programs.
Only Ameren has a coincident peak demand reduction goal calculated based on a ratio of Ameren’s annual savings goal divided by the actual average ratio of kilowatt-hour savings to coincident peak demand reduction achieved by the utility through its energy efficiency programs in 2023.
Large electric customers with annual peak demand of 10MW or more remain able to opt-out of utility EE programs, leaving considerable potential energy savings out of reach in Illinois.
For the 2026 program year, the Climate and Equitable Jobs Act (CEJA) EE provisions will continue to apply. Under CEJA ComEd must attain 17.9% cumulative persisting annual savings in 2026, and Ameren Illinois must achieve 13.6% cumulative persistent annual savings.
Illinois’ EERS does not cover municipal and cooperative utilities. Munis and coops are not regulated by the Illinois Commerce Commission.
Natural Gas
In 2009, Illinois’ energy efficiency standard was amended to include investor-owned natural gas utilities, and programs under the standard began in 2010. This required a 0.2% natural gas savings through energy efficiency delivered by 2012 and ramped up to 1.5% savings by 2019. Natural gas utilities in Illinois have never been able to hit these savings targets given the statutorily mandated spending limits. Spending on natural gas energy efficiency programs in Illinois was capped at a maximum rate impact of 2.0%. As is true on the electric side, eligible large customers are exempt from paying into natural gas utility energy efficiency programs.
CRGA amended the gas energy efficiency statute by creating a voluntary gas EE program increase for single fuel natural gas utilities (Nicor, Peoples Gas & North Shore Gas) with Illinois’ dual fuel utility, Ameren, being exempt. Under the voluntary framework, utilities can propose an EE plan with increased spending beyond the 2% cap subject to Illinois Commerce Commission (ICC) approval. The utility must demonstrate that the increased spending will result in more natural gas savings than would have been achieved in a plan under the lower spending cap and that the increased spending is necessary to achieve increased savings.
Rate Structures & Incentives
Cost Recovery
As authorized by the Public Utilities Act, a utility providing energy efficiency measures is permitted to recover the costs of those measures through an automatic adjustment clause tariff filed with and approved by the ICC, which must be established outside the context of a general rate case. Each year the ICC initiates a review to reconcile any amounts collected with the actual costs and determines the required adjustment to the annual tariff factor to match annual expenditures.
Lost Revenue Recovery
The Future Energy Jobs Act allows, but does not require, electric utilities to rate-base their energy efficiency costs, which means that these costs will be amortized over the lifetime of the measure.
Utility Incentives
Electric
CRGA allows utilities to earn performance incentives for meeting and exceeding their savings goals. Utilities earn a return on equity (ROE) on their EE programs and they can have their ROE increased as a performance incentive.
Natural Gas
CRGA allows natural gas utilities to propose a performance incentive to the ICC subject to ICC approval.
Noncompliance Penalties
CRGA also created financial penalties for failure to achieve electric EE savings goals. Similar to the performance incentives tied to ROE, utilities can also have their ROE reduced for failing to achieve their savings goal. ComEd could have their ROE reduced by up to 2% for achieving only 75% of their savings goal and could see a small reduction in ROE if they fall even 1% short of their savings goal. Ameren can have their ROE reduced by up to 1%, but penalties for Ameren do not start until Ameren falls short of their goal by 15%. There are no financial penalties for natural gas utilities failing to achieve their savings goal.
Resource Planning
CRGA created a statewide Integrated Resource Plan (IRP) process to be led by the ICC in coordination with the Illinois Power Agency, the Illinois Finance Authority, the Illinois Environmental Protection Agency and in consultation with the utilities.
The first IRP is due November 15, 2026, and the second IRP is due on September 30, 2029, and then every 4 years thereafter. The IRP must include a range of resource options that include “energy resources on both the demand-side and supply-side.”
Municipal and Cooperative utilities are not regulated by the ICC, however, under CRGA, munis and coops are now required to do their own Integrated Resource Planning process every five years that must include a public stakeholder process prior to the final plan being posted on their website.
The newly created IRP process does not alter or eliminate Illinois’ annual energy procurement plan process, but it does give the ICC authority to order changes to the procurement plans based on the findings in the IRP. The Public Utilities Act requires that procurement plans must include an analysis of the impact of building energy codes or appliance standards, as well as an assessment of opportunities to expand energy efficiency programs.
In the prepared procurement plan, the IPA must include energy efficiency programs and measures what it deems cost-effective and associated annual energy savings goals. The commission approves the energy efficiency programs and measures included in the procurement plan, including the annual energy savings goal.
- Statute: 220 IL CS 5/16-111.5B
Stakeholder Collaboration
The Illinois Energy Efficiency Stakeholder Advisory Group (SAG) includes representatives from utilities, the Illinois Commerce Commission staff, the Department of Commerce and Economic Opportunity, environmental advocates and energy efficiency consultants.
The SAG, which has met monthly since 2008, shares information and experience among energy efficiency stakeholders. It developed a Technical Resource Manual for the state's utilities and discusses EM&V and other technical issues related to energy efficiency programs. SAG has also created an Energy Efficiency Policy Manual as directed by the Commission, updated on an as-needed basis.
Illinois also has a collaborative specific to low-income energy efficiency programs, the Low-Income Energy Efficiency Accountability Committee. The goal of the Committee is to directly inform the design, implementation and evaluation of the low-income and public-housing energy efficiency programs.
Program Evaluation
Cost Effectiveness Testing
Utilities in Illinois are required by statute to use the TRC test to establish the cost-effectiveness of energy efficiency programs. Other tests may be used by utilities for their internal program design and evaluation purposes but are not required by the commission.
Net vs. Gross
Illinois utilities report net savings in their program evaluation reports to the commission. Free-ridership is measured but spillover generally is not, though in a few cases utilities have measured it for some programs.
Technical Resource Manual
The Stakeholder Advisory Group in Illinois updates the TRM annually, an effort that began in 2012. The current TRM, past versions and information related to the process of its development can be found on the Illinois Stakeholder Advisory Group (IL SAG) website.
Societal Cost of Carbon
CRGA values the societal cost of carbon at $200 per short ton expressed in 2025 dollars or the most recently approved estimate developed by the federal government that is consistent with long-term treasury bond yields whichever is greater.