Are Renewable Portfolio Standards a Policy Cure-All?: A Case Study of Illinois\u27s Experience

Renewable Portfolio Standards (“RPS”) are stated to have a plethora of benefits: job creation, renewable energy growth, reduced carbon emissions, and a reduction in retail electricity prices. Often when a policy has multiple agendas, the policy fails to meet any of the objectives. Twenty-nine states have implemented an RPS, but state policies vary with regard to the sources considered eligible, out-of-state generation, credit trading, and the process of ensuring compliance. The various policy facets affect the growth of renewable energy within the state and affect the additional stated benefits of job creation and reduced emissions. This paper examines Illinois’s RPS as a case study for analyzing the many goals and impacts of other RPSs. We use Illinois’s market for electricity as a case study for several reasons. First, the RPS in Illinois focuses on encouraging wind generation by requiring seventy-five percent of the standard be generated from wind. This aspect allows us to focus on the growth of the wind industry. Next, the electricity market in Illinois allows customers to choose their electricity supplier. We can analyze restructuring and its impact on the renewable sector. Finally, Illinois is surrounded by states whose renewable industry may benefit from Illinois’s mandate. We will also examine the impact of Illinois’s standard on the renewable electricity generation in the surrounding states