WASHINGTON (April 21, 2026) — A new report from the Progressive Policy Institute (PPI) finds that Illinois has built one of the nation’s cleanest and most affordable energy systems, but warns that calendar-driven mandates to phase out natural gas generation could undermine grid reliability, drive up costs, and push investment to neighboring states.
Authored by Neel Brown, Managing Director at PPI, and John Kemp, an internationally recognized energy markets expert, “The Illinois Challenge: Balancing Decarbonization with Economic Reality,” outlines a strategy grounded in reliability, technological maturity, and economic competitiveness.
Illinois has reduced emissions faster than the national average, driven largely by its dominant nuclear fleet and a steady, market-led shift from coal to natural gas. Emissions fell 2.1% annually between 2005 and 2023, compared to 1.2% nationwide, and the state now emits 188 tons of carbon dioxide per $1 million of economic output, more than 10% below the national average and well below every other Midwest state. Household energy spending is nearly 12% below the national average, underscoring the affordability gains that have sustained public support for continued climate progress.
“Illinois’ progress shows that durable emissions reductions come from markets, innovation, and firm low-carbon generation, not from rigid calendar deadlines,” said Brown. “The state already leads the country in clean nuclear power. The next phase requires a pragmatic strategy that protects reliability and affordability while continuing to drive emissions down.”
The authors note that the 2021 Climate and Equitable Jobs Act mandates a full phaseout of natural gas generation by 2045, a timeline that the state’s own 2025 Resource Adequacy Study warns could open significant capacity gaps just as electricity demand is surging. Illinois is currently the country’s fifth-largest electricity generator and a net exporter, but eliminating in-state gas generation is projected to turn it into a net importer reliant on the PJM and Midcontinent Independent System Operator (MISO) regional grids, both of which are expected to face capacity shortfalls by 2030.
Upward pressure on prices is already emerging. Wholesale electricity costs in the PJM region serving northern Illinois surged more than 40% in 2025 amid rapid data center growth, and residential rates jumped 11% in a single year. The authors caution that retiring firm generation before proven replacements are in place will pull energy-intensive industries to higher-emission states such as Indiana and Ohio, exporting both jobs and carbon emissions. Illinois Gov. JB Pritzker has taken a constructive step by committing to two gigawatts of new nuclear generation and lifting the state’s longstanding moratorium on new reactor construction, reflecting the kind of pragmatic, state-specific policymaking the report recommends.
To navigate this transition, the authors outline three core principles for policymakers:
The authors conclude that Illinois’ path to decarbonization must reflect its unique position as the nation’s top nuclear producer and a major electricity exporter. A successful strategy will build on the state’s market-driven progress while avoiding mandates that risk destabilizing the grid, raising costs for households and businesses, or pushing investment across state lines.
Read and download the report here.
Founded in 1989, PPI is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Find an expert and learn more about PPI by visiting progressivepolicy.org. Follow us at @PPI.
###
Media Contact: Ian O’Keefe – iokeefe@ppionline.org
