Voces in Action
Facing budget crisis, Ill. lawmakers decide energy bill can wait
Facing budget crisis, Ill. lawmakers decide energy bill can wait

Jeffrey Tomich, E&E reporter

Published: Tuesday, June 2, 2015

The Illinois General Assembly will go into overtime this summer in hopes of addressing a $3 billion budget deficit.

But efforts to advance energy policy will stay on the back burner -- probably at least until the fall veto session, and perhaps longer.

State Rep. Elaine Nekritz, a lead sponsor of a bill to expand the state's renewable portfolio and energy efficiency standards, said the timing of action on energy policy will depend on how long the current budget debate plays out.

"I think [those discussions] will suck most of the energy out of the room," said Nekritz, a Democrat representing some of Chicago's northern suburbs.

Nekritz is among legislators who want energy policy addressed on a comprehensive basis. State Rep. Linda Chapa LaVia (D), chairwoman of the House Energy and Utilities Committee, likewise has indicated that she sees various proposals being discussed as part of an omnibus energy bill.

For its part, Exelon Corp. yesterday said a legislative proposal to prop up its nuclear fleet doesn't have enough support to get traction in the extended regular session.

"Even so, we will continue our dialogue with Illinois policymakers regarding policy reforms, which would better recognize the full value that our nuclear plants provide for Illinois," the company said in a statement.

The acknowledgement comes just months after a company executive assured Wall Street analysts that there will be ample support from both parties to "run it through the Legislature."

A bridge for nuclear

The Exelon proposal, announced in late February, would create a low-carbon portfolio standard requiring 70 percent of electricity sold by the state's big two utilities to come from low-carbon resources, such as nuclear or renewables (EnergyWire, Feb. 25).

The measure was pitched as a bridge solution to keep nuclear plants running until the state implemented a plan to comply with U.S. EPA's proposed Clean Power Plan.

Exelon has said three of its six Illinois plants are unprofitable because of competition from natural gas and subsidized wind energy. The company has threatened to shut down many of the struggling plants unless there's a pathway to sustained profitability.

Chris Crane, Exelon's chief executive, last year postponed a decision on the fate of any unprofitable plants until at least mid-2015 after the Legislature agreed to study the effect of doing so on electric rates, reliability and the economy.

Exelon now said it faces a new deadline. The company said it must inform PJM Interconnection if any plants in the grid operator's footprint will not participate in the 2016 capacity auction covering the 2019-20 planning year. Two of its plants -- Byron and Quad Cities -- failed to clear the auction last year for 2017-18.

The company said it faces a similar "decision point" in December when it must notify the Midcontinent Independent System Operator (MISO) about whether the 1,100-megawatt Clinton plant will be available in next April's capacity auction, which covers the year starting June 1.

Exelon said it hasn't made any decisions yet and will continue to analyze the current and expected economics of its plants while continuing the dialogue with Illinois lawmakers.

Clean Power Plan hovers over next steps

Legislators said they'll will be watching the results of PJM's capacity auction later this summer, as well as whatever final Clean Power Plan rule is delivered by EPA -- both of which are expected to provide a lift for Exelon.

Exelon downplayed the impact of the PJM auction and EPA's final carbon rule, neither of which will ensure that nuclear power in Illinois is appropriately valued, spokesman Paul Elsberg said in an email response to questions.

"Even if the results of the upcoming capacity auction are more favorable than last year, when Byron and Quad Cities did not clear, they will affect the capacity markets three years forward, will likely only be temporary and could fluctuate significantly from year to year," Elsberg said. "A sustainable, longer-term solution is needed for Illinois' nuclear energy facilities."

Meanwhile, backers of the clean energy legislation offered by Nekritz and state Sen. Don Harmon (D) of Oak Park touted the large and diverse group of bill supporters, including 26 Senate co-sponsors and 58 in the House.

"This puts us way ahead of where we have been in these discussions in the past," Nekritz said.

Advocates for renewable energy have been working for the last few years to resolve a well-recognized conflict in state law that has stifled development of wind and solar energy in recent years.

The bill proposed in February by the Illinois Clean Jobs Coalition would go further by expanding the existing 25 percent renewable standard to 35 percent by 2030. It would also expand the energy efficiency requirement in Illinois (EnergyWire, Feb. 6).

With the Clean Power Plan final rule imminent and with uncertainty over the future of federal tax incentives, clean energy advocates said they're anxious to implement a state policy that can drive investment and jobs while helping the state cut power plant emissions.

"There is, from our perspective, a lot of urgency," said Nick Magrisso, Midwest policy advocate for the Natural Resources Defense Council. "Each day we wait, we miss this huge opportunity and all of the economic benefits that go with it."

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