Opinion

National Energy Giants Battle for Illinois’ Energy Future

A battle is shaping up at the Illinois state capitol, with national energy firms attempting to shape the energy future of the nation’s fifth largest economy.

The debate comes in advance of the release of the final US EPA Clean Power Plan (CPP) regulations on carbon pollution this summer, and industry and advocacy groups are working feverishly to help shape Illinois’ implementation of the rules in the legislature.

The fight is unique to Illinois’ political landscape and energy mix, but it also represents a microcosm of the national energy debate around the CPP regulations, with renewables, nukes, coal, environmentalists, labor and ratepayer advocates all at the table.

In one corner, a coalition of major renewable energy companies, environmentalists and consumer advocates have lined up behind the Clean Jobs bill, which would fix and expand the state’s problematic Renewable Portfolio Standard (RPS) law, expand energy efficiency opportunities and possibly cap carbon pollution in the state. The Clean Jobs Coalition lays out its goals at its website, asserting that the bill would expand clean energy and create over 32,000 jobs.

Meanwhile, nuclear giant Exelon has proposed a “low-carbon portfolio standard,” which it says will be a technologically-neutral solution to carbon reduction. But that bill would be unlikely to help anybody but Exelon’s struggling nuclear plants. “Heads-up: Exelon wins. Tails-up: Exelon wins. That’s not a market, that’s a bailout,” quipped Cara Hendrickson of the Office of the Illinois Attorney General.

A group of businesses, ratepayer advocates and others calling itself the BEST Coalition has formed to stop Exelon’s bill, and the group launched the site www.NoExelonBailout.com earlier this year. Coal generators Dynegy and NRG have also decried the Exelon proposal as giving an unfair financial lifeline to Exelon.

A third proposal, supported by Exelon sister company ComEd, would allow the utility to recover costs on things like voltage optimization, electric vehicle charging stations and microgrids, while implementing a community solar program. Many have criticized the bill for giving the utility advantages over independent businesses. Many also worry that the rate design changes in the bill would disadvantage solar.

By mid-March, the table was largely set and advocates were lobbying hard to remake the Illinois energy economy according to their vision. At press time, the Clean Bill had the most co-sponsors of the three, with over 40 representatives and 26 senators.

But as of yet neither bill has received a floor vote, and observers expect that some components of each bill will eventually be rolled into an omnibus energy package. With just a few weeks left before the scheduled end of session on May 31, it’s unclear whether the general assembly and rookie governor Bruce Rauner even want to address energy issues, especially with bigger problems on the docket.

At press time, lawmakers had yet to agree on major components of the budget, a task requiring significant time and attention from lawmakers. Throwing an additional wrench into the works, on May 8th the Illinois Supreme Court struck down a hard-fought pension reform law, opening up a $2 billion hole in Rauner’s proposed budget, and making it much harder to craft a final agreement.

The stakes are high in the Illinois energy debate, and there are lessons here for other states. Illinois is a net energy exporter, with a greater share of nuclear power than any other state, and the nation’s fifth largest wind energy portfolio. As has happened in other states, low natural gas prices have put Illinois nuclear profitability at risk, and wind has helped drive down prices further. These dynamics have yet-to-be-determined impacts on energy policy debates nationally.

Everybody from utility execs to investors to policy wonks should keep an eye on Illinois for the next few months. What happens there could foreshadow policy debates in other states and the future of energy policy across the nation.

 

Kevin Borgia is a Public Policy Manager for Wind on the Wires, a windpower advocacy group working in nine Midwest states. He can be reached at kborgia@windonthewires.orgWind on the Wires is a member of the Illinois Clean Jobs Coalition.

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