An energy bill backed by a coalition of labor unions passed unanimously through an Illinois House utilities committee Tuesday and will be heard by a Senate committee Thursday.
The bill is one of several proposed and competing major pieces of energy legislation in Illinois. Advocates of the Climate Union Jobs Act (HB 1472) say it is necessary to make sure that Illinois’ shift to renewable energy creates union jobs that pay a prevailing wage and include fair labor provisions.
Illinois AFL-CIO Secretary-Treasurer Pat Devaney said the 2016 Future Energy Jobs Act did not do enough to create labor protections and union jobs, even as it sparked a boom in solar energy. Other bills proposed in the legislature aim to restart and expand solar incentives created by the 2016 law and ensure that Illinois can meet its ambitious renewable goals.
“We don’t have to speculate about what would happen without labor standards; we have a case study in FEJA,” Devaney said. “FEJA had no labor standards in it, and what we saw throughout all sectors of renewable energy development was out-of-state contractors bringing in out-of-state workers, with no benefit to the Illinois workforce or union workforce.”
Solar companies from other states did indeed open offices in Chicago in the wake of the Future Energy Jobs Act, though local solar companies also launched and expanded thanks to the law, which also included training in solar and energy efficiency for workers from marginalized communities.
Unionization disparities
Nationally, only 4% of the solar workforce is unionized, compared to a national private sector average of 6.2%, according to a 2020 report by the National Association of State Energy Officials and the Energy Futures Initiative. It found wind power workers were unionized at rates equivalent to the overall private sector. Nuclear, energy efficiency, natural gas and coal-fired power generation all had unionization rates nearly double the national private sector average.
Devaney said that before focusing on the energy sector, he assumed that “utility-scale wind or solar was often or always done union.”
“Frankly, I learned that’s just not the case, and we’ve seen that in Illinois and across the country,” he said, citing Bureau of Labor Statistics findings that of 28 utility-scale wind farms under construction across the country, 21 are non-union; and of 61 solar farms under construction, 40 are non-union.
“We believe [renewables] will be a huge part of the Illinois economy going forward, and with federal assistance, we need to make sure these jobs — which are replacing good-paying jobs in fossil generation — are able to support a living wage and prevailing wage,” Devaney said.
Unlike other proposals in Illinois, the Climate Union Jobs Act does not aim to incentivize or accelerate a shift away from fossil-fuel generation through polluter taxes, a carbon emissions market or coal extraction fees.
“We’re not doing anything to expedite the closure of coal facilities,” Devaney said. “We know there’s going to be a transition to meet our clean energy goals, but those [coal jobs] are really good-paying union jobs. Until we have a plan in place to make sure we are taking care of those employees,” the coalition doesn’t want to see coal plants close.
Coal and nuclear plants
The Climate Union Jobs bill includes a just transition plan requiring advance notice of coal plant closures and support for displaced workers, including 24 months of health insurance available at the previous cost and benefit level, full tuition scholarships for trade schools and higher education, and employment assistance. Empowerment zones created by the bill would incentivize investment in areas with closing coal plants.
Like the proposed Clean Energy Jobs Act backed by a wide coalition of community and clean energy groups, the Climate Union Jobs Act includes subsidies for the state’s four nuclear plants. The Future Energy Jobs Act also included subsidies for nuclear plants, amid much controversy.
The Climate Union Jobs Act would create 74 million megawatt-hour “carbon mitigation credits” for nuclear plants, including the Braidwood, LaSalle, Bryon and Dresden plants. Nuclear plants already receiving zero-emissions credits created by the Future Energy Jobs Act would not be eligible. Exelon, which owns the state’s nuclear fleet, has said it would close plants without more state subsidies. Climate Jobs Illinois, the coalition that backs the labor bill, says the legislation would protect the jobs of 28,000 people employed directly and indirectly in the industry, and $125 million in annual tax revenue that the nuclear plants provide.
“Not only would it be devastating to the Illinois worker,” Devaney said, “it would be devastating to whole regions of the state if we lost the nuclear plants.”
The renewables industry companies that support the Path to 100 bill have opposed additional support for nuclear plants, and that bill does not include such subsidies. Some consumer and community groups have also stridently opposed further subsidies for nuclear plants.
“Exelon’s aging, expensive power plants should not receive further direct public support unless such support is narrowly tailored and time-bound to meet a specific need as identified by outside certified accounting,” said Illinois Public Interest Research Group Director Abe Scarr, in testimony before the House subcommittee opposing the Climate Union Jobs bill. “Any such direct support should have guardrails and stronger provisions to end and claw back support if market conditions change making such narrowly tailored public support unnecessary. Any such direct support must only come within a comprehensive plan to transition Illinois to 100% renewable energy, including firm closure dates for nuclear and fossil fuel generation.”
Labor protections
The Climate Union Jobs bill would also create 35 million megawatt-hour renewable portfolio standard credits to spur renewable development, with 25% of the solar dedicated to public schools. And it provides funds for electrifying school buses and other transportation electrification initiatives and mandates labor protections for work on electric vehicle charging infrastructure.
The Climate Union Jobs Act does not explicitly require that all renewable projects receiving state incentives be union, but it mandates that they pay a prevailing wage in the region, that employers agree to remain neutral in the face of any unionization drives, that fair-bidder standards be followed, and that project labor agreements setting the terms and conditions of work be in place. Such provisions would apply to both utility-scale wind and solar projects and smaller distributed solar projects that get renewable energy credits or incentives through the Future Energy Jobs Act’s equity-focused Solar for All program.
Smaller and newer solar companies, including companies supported under equity programs for entrepreneurs from marginalized and environmental justice communities, have typically not been unionized and might have a harder time meeting the costs and bureaucratic requirements of labor standards. But Devaney said the funding available through renewable energy credits and other programs should make it possible for such companies to meet the requirements and thrive.
Climate Jobs Illinois points to a study by the UC Berkeley Labor Center finding that prevailing wage requirements increase solar project costs by about 5% to 9% in the residential sector, 2% to 5% in the commercial sector, and 1% for utility-scale projects. Those costs are small overall and are offset by the increased value provided by more skilled workers that fill prevailing wage jobs, the research found.
The study looked specifically at Illinois and found that prevailing wage provisions could increase wages for residential solar workers by “at least $15,000 per year, with a four-fold increase in benefits like health insurance and retirement contributions,” according to a summary of the findings. “These significant quality-of-life improvements for workers and their families would increase total project costs only 1-9%.”
The Climate Union Jobs bill would also include diversity reporting requirements and diversity goals for trades unions involved in renewable energy and their apprenticeship programs, aiming to address long-standing racial disparities in the sector. And it would invest $50 million in programs to train and recruit marginalized communities into the renewable energy sector, Devaney said.
Private interests
Critics of the Climate Union Jobs bill say it could slow the transition to renewable energy and increase the profits of utility ComEd and its parent company Exelon at the expense of ratepayers.
The bill calls for ending controversial formula rates charged by utilities, and for increased transparency from utilities. But in testimony before the House committee, Scarr said the new rate structure it proposes could be worse for the public. He said that affordability provisions in the bill are structured in a way that utilities would actually earn a rate of return (or guaranteed profit) — ultimately charged to ratepayers — on deferred billing costs, and he said the transportation electrification program is designed to benefit ComEd.
“If the General Assembly believes the policies passed during the ComEd bribery scheme were good but were not biased enough towards ComEd and Exelon — that consumers should be forced to pay more to get less — it should pass the policies contained in HB1472 HFA1,” testified Scarr, invoking sarcasm. “In doing so, it should defend its position to Illinois voters rather than obscuring its intent by, among many other things, claiming to end formula rates while doing the opposite — reproducing formula rate’s worst aspects and making them more profitable.”
He concluded: “While packaged as addressing the climate crisis and layered with regulatory complexity, this legislation’s primary purpose is clear — to increase the profits of Exelon Corporation, directly and through its subsidiary, ComEd. Should it become law, the result will be a slower, more expensive transition to a clean energy economy, unduly controlled by private interests rather than democratically accountable institutions.”