SPRINGFIELD, Ill. (WCIA) — A power struggle over which companies can set the price of energy is brewing at a little-known federal agency, and clean energy advocates warn it could mean millions of Illinois residents might have to pay more for their electric bill.
“If we do nothing, rates are going to go up this year,“ said Jen Walling, the Executive Director of the Illinois Environmental Council.
A statement from the Citizens Utility Board added, “If the General Assembly doesn’t act this spring, Illinois consumers would be forced to pay more for dirty energy we don’t need.“
A recent order from the Federal Energy Regulatory Commission (FERC) threatens to block clean energy developers from bidding on energy capacity at a massive auction in May. If wind, solar, and nuclear developers are prevented from bidding at the capacity auction, they warn natural gas and coal developers would have more latitude and leverage to set their own rates.
The rules would, however, allow the Illinois Power Agency to expand its own authority to step in and bid on behalf of nuclear or renewable energy developers, essentially acting as their agent in the capacity auction.
“What they said to states is that your programs can continue, but you need to develop your own sort of reliability and capacity programs,“ said David Fein, Exelon’s Vice President of State Governmental Affairs.
“We believe that if designed correctly, you could do it in a manner to reduce costs compared to what customers are paying now,“ Fein said.
Walling and a number of other clean energy advocates suspect the fossil fuel industries are using their clout and leverage in the Trump administration to punish states like Illinois for setting up incentives for nuclear and renewable power developers. Coal and natural gas developers have sometimes struggled to compete with renewable energy prices, which they argue are artificially deflated by state incentives and subsidies.
The new FERC rules would effectively prevent nuclear plants, like the ones Exelon operates in Clinton and in the Quad Cities, from getting paid for running around the clock.
“The technology runs 24/7, 365 days a year,“ Fein said. “Because of the large amounts of carbon-free power it produces, it is a great agent for addressing climate [change] and making sure that the air emissions stay in check.“
A 2016 plan enacted under the Rauner administration called the Future Energy Jobs Act (FEJA) provided rewards for Exelon in the form of zero carbon credits. Critics decried the $235 million in annual subsidies to Exelon as a bailout. Supporters hailed it as a long-term economic and environmental victory that kept their Clinton and Quad Cities nuclear plants up and running, and kept their carbon-free, pollution-free plants contributing to the state’s electric grid.
A study published this week highlighted how much FEJA and another program cost customers in Illinois. The white paper, put out by the Building Owners and Managers Association of Chicago and the Chemical Industry Council of Illinois, claimed the true cost of FEJA and the Energy Infrastructure Modernization Act (EIMA), which was passed under the Quinn administration, was back loaded and wouldn’t impact most ratepayers until after 2020.
“The utility bills that have been introduced have been very impactful to the utility bills that are coming into consumers not only in homes, but in industrial and commercial businesses across the state,“ said Julie Vahling with AARP Illinois. The senior advocacy group also participated in publishing the study.
“It has been very detrimental to people across the board,“ Vahling said. “The numbers are very impactful, and we want to make sure that the General Assembly, the House and the Senate, before they agree to putting legislation through, that they think about the implications for consumers across the state.“
The industry report projected Ameren Illinois and ComEd customers will pay a combined $19.4 billion in higher electric bills between 2013 and 2027 as a result of FEJA and EIMA. The study estimates EIMA could cost customers an extra $14.8 billion in higher electric bills between 2013 and 2027, and suggests FEJA could cost ratepayers an extra $4.6 billion over the same span.
Walling cast doubt on the study, arguing, “70 percent of the program dollars of the [FEJA] bill went to energy efficiency or renewable energy. For every dollar that we spend on energy efficiency, we save three dollars.“
While individual rates have crept up in recent years, Illinois consumers are using less energy on average, so the total cost of the electric bill has remained low. The cost of the average electric bill in Illinois is the sixth lowest average of any state in the nation.
“So I would really question the validity of a study that would say things like clean energy have cost consumers money, because these have been structured in a way to be a real cost savings to keep energy low for average people and to help protect the environment,“ Walling said.
One main reason for low electric bills is due to the raw amount of energy the state produces.
“Illinois has the largest amount of nuclear power anywhere in the country,“ Fein said. “We lead the country in the most clean energy, so nuclear, wind, solar. Illinois is really a leader on clean energy in the country.“
Propping up nuclear plants with subsidies is also a key component of the long term strategic plan for renewable energy developers to eventually take over the entire industry.
“If nuclear power plants in Illinois go offline, they will be replaced by coal and natural gas, which are carbon producing fuels,“ Walling explained.
Her group, along with Democratic Governor J.B. Pritzker, has vowed to convert the state to 100 percent reliance on renewable energy by the year 2050.
“Our Clean Energy Jobs Act does phase out nuclear power over time,“ Walling said. “It has a set goal for decarbonization in terms of coal and natural gas coming offline, but it has a little longer of a phase out for nuclear power.“