* From a November 1st Crain’s editorial…

You know you’ve got a good thing going when profitability is only a bailout away. That’s the kind of mojo that’s working at Exelon Corp., which is signaling it will seek legislation next year to provide hundreds of millions of additional dollars to its fleet of Illinois nuclear plants, which the Chicago power company contends are struggling financially.

Exelon says three of its six plants in Illinois are in the red and will stay that way without policy changes in Springfield. Presumably the other three are profitable, but Exelon won’t go into details. None of this would be much of an issue if Exelon weren’t on the cusp of seeking a blanket fix for what could be a very specific problem. The company says it plans to pursue a “market solution” in Springfield that benefits all of its nukes in Illinois, even those in the black. […]

Crain’s Senior Reporter Steve Daniels walks readers through the numbers we do know in the Oct. 27 issue. He confirms Exelon’s nuclear business indeed has taken a hit. Pretax profits at the Midwest operation plunged by almost three-quarters to an estimated $4.90 per megawatt-hour in 2013 from $17.38 in 2011. Midwest revenue fell 28 percent in the same period, undercut by cheap natural gas and unusually low “capacity” fees paid by all energy consumers to power plants to ensure electricity is available when demand soars.

Those declines are tough. Even so, Exelon’s Midwest fleet as a whole still is profitable by Crain’s estimates. And the pain will be alleviated in the coming year. A big increase in capacity prices paid to power plants—costs that caused the summer spike in most Chicago-area consumers’ electricity rates—will boost Exelon’s Illinois revenue by $388 million from June 1 to May 31, according to one estimate. Meanwhile, there’s good news on the corporate earnings front: Exelon’s third-quarter profit rose 35 percent to $993 million, powered by gains in its utility and generation units.

* Well, Steve Daniels ran another story the other day about how that original $388 million estimate was only the beginning…

PJM Interconnection, the Valley Forge, Pa.-based regional power-grid operator for all or parts of 13 states including northern Illinois, on Dec. 3 approved changes to the way electricity generators are compensated for their promise to deliver during peak-demand periods. The changes, which are subject to approval by the Federal Energy Regulatory Commission, will benefit Chicago-based Exelon more than any other power company in the 13-state region, analysts say.

When they take effect in 2018, those alterations will funnel more than $560 million in additional revenue that year to five of Exelon’s six Illinois nuclear stations, according to an analysis by former Illinois Power Agency Director Mark Pruitt. (One, the downstate Clinton plant, isn’t in the PJM region and wouldn’t benefit from the special payments.) Spread across all six of Exelon’s plants, that revenue would add roughly 22 percent to the net revenue they collected as a group in 2013.

Compared with what Commonwealth Edison customers pay today, the changes would hike the price of electricity 19 percent. Customers’ total rates would increase by 11 percent, although that number is expected to rise with increases in the separate cost of delivering the juice. […]

The increases PJM is trying to engineer would benefit Exelon more than any other power company operating in PJM’s footprint, according to Hugh Wynne, an analyst at Sanford C. Bernstein. Based on the $272-per-megawatt-day capacity price that PJM is forecasting (118 percent higher than today’s), Exelon stands to enjoy an earnings boost of 55 cents per share, 21 percent higher than analysts’ consensus 2016 earnings estimate, Wynne said in a Nov. 21 report.

* Meanwhile…

When he takes office as governor Jan. 12, one of the first hot potatoes Bruce Rauner may have tossed to him is the recently passed bill to extend the smart grid law that allows for annual electricity rate hikes via a formula.

Senate President John Cullerton is holding onto the bill for now and may not deliver it to the governor’s office until smart grid foe Pat Quinn leaves office. In so doing, Cullerton clearly hopes that Rauner will look more favorably on the legislation, which would extend the formula rates Commonwealth Edison and Ameren Illinois are charging for two years. The law then would sunset in 2019 rather than 2017, as it currently does. […]

If Cullerton waits and sends the bill to Rauner, Rauner won’t have to act on it immediately despite the fact that a new General Assembly will convene on Jan. 14. He would have the full 60 days governors normally have to sign, veto and make amendatory changes to bills that cross their desks.

That’s good for him politically because otherwise he might feel pressured to sign into law electricity rate hikes statewide as one of his first official acts as governor.

Actually, all he can really do is sign it or veto it. An amendatory veto couldn’t be sustained in the next General Assembly. He’d kill it by doing that. Then again, it would be a way of sending a message to the GA about what he would accept. We’ll see.