May 18, 2023

Environmental, Natural Resources, & Energy Law Blog

CEJA’s Effect on Residential Self-Generators in Municipal Utilities and Electric Cooperatives - April Foreman


CEJA’s Effect on Residential Self-Generators in

Municipal Utilities and Electric Cooperatives

April L. Foreman, JD

Environmental, Natural Resources, and Energy Law LLM Candidate




Illinois has three types of electric utilities: investor owned utilities (IOUs), municipalities (munis), and electric cooperatives (co-ops).[1] Currently Illinois has four IOUs,[2] forty-two munis, and twenty-five rural co-ops serving approximately 1 million Illinois residents.[3] Historically, Illinois’ IOUs provided customers easily accessible information about generating their own solar energy and paid one-to-one, or equivalent, rates for excess electricity self-generators produced.[4] Munis and co-ops, however, have not had the same requirements, leading to an array of different local policies regarding solar self-generation information access, system size, storage of excess energy, reconciliation timing of credits and charges, and rate design.[5] While the first four terms are understandable, rate design is nuanced. Rate design is a: “framework that utilities and regulators use to set prices for electricity services [and] … is a fundamental element of a well-functioning electricity system.”[6] These varying policies result in multiple payback timelines and decreasing cash gained over the life of solar investment depending upon the self-generator’s location.[7]Michelle Knox, owner of WindSolar USA, Inc., commented about muni and co-op policies, “We need transparent and standardized policies across Illinois in order to eliminate discrimination and allow fair access to solar incentives and rate design, and protect the nearly 1 million Illinoisans affected by these policies.”[8]

On September 15, 2021, Governor J. B. Pritzker signed The Climate and Equitable Jobs Act (CEJA),[9] which commits Illinois to a 100% carbon-free power sector by 2045”.[10] CEJA also applies in part to munis and co-ops and their relationships with self-generators.[11] CEJA guarantees customers in Illinois the right to self-generate electricity, including solar.[12] CEJA states that munis and co-ops “should recognize and implement policies to provide the opportunity for their residential and small commercial customers who wish to self-generate electricity and for reasonable credits to customers for excess electricity, balanced against the rights of the other non-self-generating customers.”[13] Some of CEJA’s provisions regarding solar self-generators located in Illinois munis and co-ops will remove barriers and incentivize solar installation, while other changes will disincentivize both solar installation and use of virtual grid storage.This blog post asserts that while CEJA is a step in the right direction, the legislature needs to amend CEJA to require greater informational transparency, consumer education, floors or base calculations for rate design, and consistent reconciliation timelines to accomplish CEJA’s ambitious carbon-free goals.

A Story of Solar Ownership in a Municipal Electric Utility Service Area

In October 2018 my husband and I heard a news story regarding the United Nation’s Intergovernmental Panel on Climate Change’s (IPCC) Report on global warming.[14] We decided we needed to install rooftop solar. During the process, our solar contractor let us know because we lived in a muni service area, and not an IOU, our solar experience would be different for approval, for solar payback timeline, and in amount the utility reimbursed us over the system’s life. We nodded and continued to pursue our solar project but did not understand the implications of this comment. Information in our service area was not easily available as we were one of the first larger residential installations. We communicated with our St. Charles Municipal Electric Utility (SCMEU) Public Works Manager multiple times to understand the process. In October 2019, we signed an Interconnectivity Agreement with SCMEU.SCMEU connected our two rooftop arrays, totaling 42 solar panels, about a month later (see Figure 1 showing our solar arrays).




We received several “surprises” after our installation was complete. Upon receiving our first post-installation electric bill, we realized the bill did not list any excess generation credits. I contacted SCMEU, who told us they did not remotely connect to our bi-directional meter, and a worker would manually download the information quarterly at a cost of $25 per trip. The SCMEU Public Works Manager later removed this fee as not necessary.[15] Additionally, SCMEU’s older billing system could not display credits from our solar generation, making our bills difficult to understand, which led to further calls to SCMEU. We learned SCMEU would email us a quarterly spreadsheet containing our system’s downloaded data. SCMEU would also calculate the excess generation from our solar production by spreadsheet and reimburse us based on a wholesale rate and net billing system, rather than a net-metering retail rate we had expected. This is a difference of approximately four cents per kilowatt (kW), reducing our payback time and total cash out of our system. We are now contemplating onsite battery storage as using a battery will decrease our reliance on a utility that charges us a retail rate but pays for our excess clean energy production at a lesser current wholesale rate.

This past year we also learned that to effectively use our system, change our habits, and make the greatest environmental impact, we needed a system consumption meter. Our contractor

installed the consumption meter that “reads the


energy/power consumed” by our home.[16] This monitor allows us now to understand and have the option of matching our usage with the timeline of our excess energy production, especially since we own an electric vehicle (EV) (see Figures 2, 3, 4[17] for examples of information a consumption meter provides). We also realized that other munis require self-generators to install a consumption meter to operate their solar systems.[18] Throughout this solar journey we had researched and asked questions, but we still did not understand the policy details of self-generation in a smaller municipal utility in Illinois. We had to try to tackle each new surprise as each came up. This was inefficient and challenging.


CEJAs Implementation Solves Some Issues

Municipal Transparency

The lack of easily accessible information regarding self-generating policies leads to extended installation timelines and misunderstandings regarding payback and cash out policies. CEJA requires that munis’ “net metering and interconnection policies” comply with the Act and that each muni post their policies on a public area of each muni’s website by March 14, 2022.[19] SCMEU now has its CEJA compliant ordinances and solar application on its website, making it easier for prospective self-generators and installers to find and review.[20] Geneva, a neighboring muni, also has its solar information on its website on a “Solar Power Information” Tab.[21] CEJA’s requirement of accessible, publicly placed information removes the informational barrier for potential and actual self-generators from the pre-application time through the financial life of the self-generator’s solar system. This improved access to information will encourage new solar generators in muni served areas and make the application process more efficient and less challenging.

Upfront Cost Defrayed for Self-Generators

A barrier to solar self-generation is expense.[22] Illinois defrays the initial cost of solar self-generation with its Renewable Energy Credit Illinois Shines program (Illinois Shines), also known as the Adjustable Block Program, which the Future Energy Jobs Act (FEJA) originally authorized and developed.[23] CEJA renewed and provided additional funding to reopen Illinois Shines, on December 14, 2021, ninety days after Governor Pritzker signed CEJA.[24] Illinois Shines “provides payments in exchange for 15 years of Renewable Energy Credits (“RECs”) generated by new PV systems.”[25] RECs “represent the environmental value of the electricity generated from solar panels, and not the electricity itself.”[26] Illinois’ Renewable Portfolio Standards (RPS) require Illinois Power Agency (IPA) to now purchase 50% renewable energy by 2040. Before CEJA Illinois required 25% renewable energy by 2026.[27] IPA can purchase RECs to meet their required renewable resources in their portfolio.[28]Depending upon the system size and date of application, RECs can offset the initial cost of solar self-generation by thousands of dollars incentivizing solar installation and self-generation.[29]

Prior to CEJA, the small system cap for initial fund distribution from Illinois Shines was 10 kW.[30] CEJA expanded the small system cap to 25 kW so even more self-generators can recoup payment within months of interconnectivity.[31] A larger small cap designation allows for a greater residential energy offset, which may include residential EV charging. This increased cap will allow access to more types of generators like farms and churches, which could not afford the initial investment and longer payback timeline.[32] CEJA’s increased small system designation will continue to incentivize solar in muni and co-op service areas where other policies do not.

Inconsistent Rate Design and Reconciliation TimingGroup

The amount a self-generating customer can earn over the life of a solar system above the initial outlay is critical to incentivizing solar. A muni or co-op’s choice of a specific rate design and/or reconciliation timeline critically impacts that incentive. To get to this discussion we first need to review the basics of a grid connected solar system. Typically, photovoltaic (PV) systems generate excess electricity during sunnier times and sunnier months.[33] These time periods do not necessarily correspond with high consumption times, as the solar consumption graphic from our family’s system illustrates (see Figure 5).[34] Net metering with a utility solves this mismatch of consumption and production.[35] For these interconnected PV systems, net metering functions like storage or a battery without the upfront cost.[36] Before CEJA, munis and co-ops could set policies leading to varying rate


designs and multiple timelines to reconcile this virtual storage.[37]

CEJA now guarantees a customer’s right to “receive fair credit for excess energy” or “reasonable credits to customers for excess electricity”.[38] While CEJA provides baseline concepts of reasonable and fair credits, munis still determine rate design and reconciliation timeline they offer to their customers.[39] These policies affect both payback time and cash out of the system.[40] Munis can use payment rates for kWs ranging from the least amount of avoided cost, currently approximately 3 to 4 cents,[41] to retail, currently about 12-14 cents.[42] Munis and co-ops also determine if they will reconcile credits in real time, monthly, quarterly, or annually.[43] The reconciliation timeline affects how long a self-generator can keep their solar credits in the virtual net metering or net billing “battery”.[44] For example, excess generation is highest in June and July in the Northern Hemisphere.[45] If this excess credit can be banked across a year and credited against use in December and January, the credit offsets a greater expense for the self-generator.[46] However, if the muni’s policy reconciles credits on a monthly scale, June’s excess generation will only offset the self-generators consumption in June.[47]

In Figure 6, WindSolarUSA compared annual reconciliation calculation to a real time reconciliation calculation for the same solar self-generator.[48] The payback timeline in this example shows a difference of 14.4 years to 4.6 years, and the cash amount a muni or co-op would reimburse the self-generator over the solar system’s life went from $46,523 to $9,293.[49] This is a dramatic difference in the life of a solar investment. These policies have already started to deter solar self-generation in Illinois.[50] In territories using “net billing with no value for solar incorporated” contractors see a significant decrease in solar sales.[51]

If munis and co-ops choose real time reconciliation and lower reimbursement rates, munis and co-ops will disincentivize self-generation compared to a muni or co-op at the other end of the spectrum.[52] Real time reconciliation and actual cost policies will also likely incentivize self-generators to use actual battery storage instead of the virtual storage on the grid. CEJA also specifically allows battery storage, complicating the issues around rate design and reconciliation timing further. If munis do not pay customers at a reasonable rate, customers have a greater incentive to store and keep their own excess clean energy generation.[53] Although CEJA includes a rate calculation to apply in 2025 that is “expressly required to be calculated with values for capacity and transmission[,]” individual munis still set rate designs and reconciliation timelines, which will have the same inequitable and potentially deterring result.[54]

Future for Self-Generators in Illinois Munis and Coops

CEJA offers some steps in the right direction to encourage more solar self-generation in Illinois, including a right to self-generation, access to information, transparency, Illinois Shines REC program renewal, and right to energy storage.[55] CEJA also sets the minimum concepts of fair and reasonable crediting.[56] These requirements and funding reduce many of the informational and economic barriers to solar self-generation in muni and co-op serviced areas. CEJA did not, however, set consistent required rate designs and reconciliation timing policies for munis and co-ops. Leaving forty-two different munis and twenty-five rural co-ops to still set rate designs and reconciliation policies continues the disparity and inequities of varying rate design and reconciliation among self-generators disincentivizing solar installments and self-generation.

Solutions to CEJA and Muni Policies

Although CEJA’s policies are an improvement, the legislature needs to amend CEJA to include greater informational transparency, require consumer education, require reconciliation timelines, and require floors or base calculations for rate design to benefit self-generating customers in munis and co-ops service areas. Illinois does not educate consumers in electrical engineering or municipal utility policies. Consumers are at the mercy of available information. While CEJA required information placement on city websites in public areas, CEJA did not clarify where. Munis need to place this information not only in an accessible portion of the website but also within the top menu of a utility’s landing page. Additionally, all solar self-generators need to have uniform education from the state about the basics of solar self-generation. The state should include muni and co-op specific topics for prospective solar self-generators. The legislature should require education before munis or co-ops could accept a permit application to reach a potential self-generator early in the process. Consumer education would prevent misunderstandings and incorrect payback expectations for solar self-generating systems. Additionally, munis and co-ops should implement an optional mentor program allowing prospective self-generators access to self-generators with operating systems. This would assist the prospective self-generator in their service area and potentially free up utility worker time. The state should also provide a list of questions your muni or co-op, and/or contractor must answer for each solar self-generation applicant. The legislature should also amend CEJA to include a calculated rate design floor and a consistent reconciliation timing. While having concepts that munis need to consider for their policies is a start, consideration does not guarantee equity for Illinois self-generators, as illustrated in the rate and timing example above. To accomplish CEJA’s ambitious carbon-free goals, Illinois will need to incentivize as many self-generators as possible and will need to amend CEJA to continue to incentivize muni and co-op solar self-generators.

[1] Ill. Com. Comm’n, Utility Co. Database Entity Search, (last visited Mar. 10, 2023); Ill. Mun. Elec. Agency, Members, (last visited Mar. 10, 2023); N. Ill. Mun. Power Agency, NIMPA Member Util., (last visited Mar. 10, 2023); S. Ill. Power Coop., Members, (last listed Mar. 10, 2023); Prarie Power, Inc., (last visited Mar. 10, 2023); see also Greg Hubert, Ill. Muni & Coop Elec. Util. & Barriers to Renewable Energy, (last visited Mar. 10, 2023).

[2]Ill. Energy Ass’n, Electric Utilities in Ill.: Electric Utilities and Power Plants in Ill. with Senate and House Representative Boundaries, (last visited Apr. 6, 2023).

[3] Hannah Lee Flaith, Deadline nears for electric munis & co-ops in Ill. to update Policies to ensure broadened, equitable, access to solar energy, Daily Herald, February 21, 2022, (last viewed March 6, 2023); Prarie Power, Inc., (last visited Mar. 10, 2023); see also Greg Hubert, Ill. Muni & Coop Elec. Util. & Barriers to Renewable Energy, (last visited Mar. 10, 2023).

[4] Ill. Net Metering, Citizens Utility Bd., (last visited Feb. 15, 2023); Ill. Att’y Gen.: Kwame Raoul, Energy Efficient Net Metering & Interconnection, (last visited Mar. 10, 2023).

[5] Interview with Paul Hopkins, Public Works Manager - Elec. Services, City of St. Charles (Feb. 14. 2023); Flaith, supra note 3.

[6]USAID, Primer on Rate Design for Cost-Reflective Tariffs, (last viewed Apr. 10, 2023) at 6.

[7] Id.; 65 Ill. Comp. Stat. Ann. 5/1-1-11 (LexisNexis 2023).

[8] Quoted in Flaith, supra note 3.

[9] Press Release,, Gov. Pritzker Signs Transformative Legis. Establishing Ill. as a Nat’l Leader on Climate Action (Sept. 15, 2021), viewed (last viewed Mar. 10, 2023).

[10] Nikhil Vijaykar, Ill.’s Landmark Energy Law Includes the Nation’s Most Comprehensive Grid Planning Requirements, (Feb. 15, 2023, 10:53 AM), .

[11]20 Ill. Comp. Stat. Ann. 730/5-1 - 5-95 (LexisNexis 2023).

[12] 220 Ill. Comp. Stat. Ann. 5/17-900(a)-(b) (LexisNexis 2023).

[13] Id. at 5/17-900(a).

[14] Inter’l Panel on Climate Change, Special Rep.: Global Warming of 1.5°C, (last visited Mar. 10, 2023).

[15]Interview with Paul Hopkins, supra note 5.

[16] SolarEdge, Consumption Monitoring - Application Note (for North America), (last viewed Apr. 10, 2023) at 1.

[17]April Foreman, SolarEdge App for Tuesday, Apr. 18, 2023, week, and month view, (last viewed Apr. 18, 2023).

[18] Telephone Interview with Aaron Holton, Elec. Div. Superintendent, City of Geneva (Mar. 10, 2023).

[19] Flaith, supra note 3.

[20] St. Charles, Ill., Mun. Code Book § 13.08.320 (2022), (last visited March 9, 2023).

[21] Geneva, Solar Power Information, (last viewed Mar. 10, 2023).

[22] Union of Concerned Scientists, Barriers to Renewable Energy Technologies, Updated Dec. 20, 2017, (Last viewed Mar. 10, 2023).

[23] EnergySage,What to know about Ill’s SREC program, (last viewed Apr. 10, 2023) discussing an overview of Ill’s SREC and Ill. Shines program; Press Release, Ill. Shines, Ill. Shines Receives New Funding & Changes with the Passage of the Climate & Equitable Jobs Act, (last visited Mar. 10, 2023).

[24] Id.; Nat’l Res. Def. Council, Il’s Adjustable Block Program Meets Staggering Interest, Feb. 25, 2019, (last viewed Apr. 10, 2023).

[25] Ill. Shines, Ill. Shines: Supporting Solar Dev. in Ill.,, (last visited Mar. 10, 2023).

[26] Id.; Center for Res. Solutions, What is a Renewable Energy Certificate, (last viewed Apr. 10, 2023).

[27] Citizens Utility Bd., CUB’s Guide to Renewable Energy Plans, (last viewed Apr. 10, 2023); U.S. Energy Information Admin., Today in Energy: Five states update or adopt new clean energy standards in 2021, Feb. 1, 2022, (last viewed Apr. 10, 2023) with graphic showing Ill.’s increasing RPS target.

[28] Citizens Utility Bd., CUB’s Guide to Renewable Energy Plans, (last viewed Apr. 10, 2023).

[29] Certasun, Ill. Solar Incentives, (last visited Mar. 10, 2023); Ill. Power Agency, Current Program Guidebook, October 18, 2022, at 19, (last visited Mar. 10, 2023).

[30] Interview with Paul Hopkins, supra note 5.

[31] Ill. Power Agency, Current Program Guidebook, October 18, 2022, at 19, (last visited Mar. 10, 2023); Ill. Clean Jobs Coalition,The Climate & Equitable Jobs Act, (Last viewed Mar. 10, 2023).

[32] Ill. Clean Jobs Coal.,The Climate & Equitable Jobs Act, (Last viewed Mar. 10, 2023).

[33] NEA: Action for Warm Homes, How Much Elec. do Solar Panels Produce?, (Last viewed Mar. 12, 2023).

[34] April Foreman, SolarEdge App for Tuesday Mar. 7, 2023, (Last viewed Mar. 10, 2023).

[35] EnergySage, What is Net Metering & How Does it Work?, (last viewed Mar. 11, 2023).

[36] Id.

[37] Interview with Paul Hopkins, supra note 5.

[38] 220 Ill. Comp. Stat. Ann. 5/17-900(a) - (b)(4) (LexisNexis 2023).

[39] Id. at 5/17-900(a).

[40]WindSolarUSA & Ill. Clean Jobs Coal., Hot Topics Regarding Your Right to Self-Generate Solar Energy, (last viewed Mar. 10, 2023).

[41] Interview with Aaron Holton, supra note 18.

[42] WindSolarUSA & Ill. Clean Jobs Coal., supra note 40.

[43] Id.

[44] EnergySage, supra note 35.

[45] NEA: Action for Warm Homes, supra note 33.

[46] Energy Sage, supra note 35.

[47] Id.

[48] WindSolarUSA & Ill. Clean Jobs Coal., supra note 40.

[49] Id.

[50] Id.

[51] Id.

[52] Id.

[53] 220 Ill. Comp. Stat. Ann. 5/17-900(a) - (b)(4) (LexisNexis 2023).

[54] MayerBrown, Ill. Enacts Comprehensive Climate & Clean Energy Legislation, JDSupra Oct. 19, 2021, (Last Viewed Mar. 11, 2023); Interview with Paul Hopkins, supra note 5.

[55] Interview with Paul Hopkins, supra note 5.

[56] 220 Ill. Comp. Stat. Ann. 5/17-900(a) - (b)(4) (LexisNexis 2023).