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New Exelon bailout bill emerges

Friday, Oct 28, 2016

* Steve Daniels says a new draft of Exelon’s subsidy bill is emerging in Springfield

A new draft version of the bill, obtained by Crain’s, sets forth a different way to calculate subsidies for Exelon’s two at-risk nukes than previous versions, incorporating a social cost of carbon pollution as the baseline for rewarding the nukes for their lack of emissions and then making adjustments based on market conditions. But, like a version from last spring, the subsidy would be capped at $265 million per year. […]

More additional ratepayer charges would support wind and solar energy development in Illinois, made possible by state-negotiated power purchase contracts. The measure calls for more than 4,000 megawatts of new wind and solar over the next 14 years, funded by a charge on the delivery portion of customers’ electric bills. That charge would supplant the current system of requiring power suppliers to pay to meet required renewable energy usage and then passing those costs along to customers.

In addition, steeper charges on electric bills would support much more ambitious utility efforts to reduce power consumption. But, for the first time, utilities like ComEd would be allowed to earn a profit from their administration of these energy efficiency programs. Currently, utilities recoup their administrative costs from ratepayers, but aren’t permitted to charge extra to earn a return.

Missing so far from the bill are provisions Dynegy is seeking to funnel more revenue to its struggling coal fleet in Southern Illinois. Exelon and Dynegy have talked about having the state take over from the regional grid manager for downstate Illinois the responsibility of buying “capacity,” or the obligation to deliver when power demand is highest, from power generators. That would boost the revenue Dynegy’s coal plants receive from downstate ratepayers and allow the company to keep open facilities it’s announced it will close. […]

Ratepayer-funded help for Dynegy is likely to be added to win downstate votes for the package. But that will put environmentalists who’ve lobbied for the bill’s clean energy and efficiency programs in the difficult position of endorsing actions to keep open polluting power plants that otherwise would close.

And, of course, ComEd’s plan to charge people based on their highest usage time is still in there.

This is one heavy lift.

- Posted by Rich Miller        

  1. - Ggeo - Friday, Oct 28, 16 @ 11:27 am:

    Cue new BEST ad in 3, 2, 1…

  2. - SportShz - Friday, Oct 28, 16 @ 11:33 am:

    Does Exelon and ComEd not realize that IL has had a budget in over a year, that social service programs and families are struggling..? All they care about is their bailout and huge rate hike based off a new method to charge people more for their highest usage. When a small muni electric utility tried this in KY, seniors and other low-income ratepayers hid out at McDonalds and the mall in an attempt to keep their electric bills from soaring with demand charges. Can you only imagine this on a state-wide basis in IL???

  3. - Anon221 - Friday, Oct 28, 16 @ 11:34 am:

    Exelon owes over a billion to the IRS, is giving out dividends to shareholders, and buying other nukes. Yep, they need a bailout.

  4. - Earnest - Friday, Oct 28, 16 @ 11:42 am:

    As long as we don’t call it a “tax” or “welfare,” I think it will make it through.

  5. - NorthsideNoMore - Friday, Oct 28, 16 @ 11:43 am:

    Sportz @ 11:33 Utility companies and and other business are not impediments to the state budget process.
    Smart electric consumers will benefit from much of this…If gererating plants close elecricity costs will skyrocket… Suppy and Demand.

  6. - SportShz - Friday, Oct 28, 16 @ 11:52 am:

    North @ 11:43 it’s about Exelon and ComEd not living in the current reality of IL and the impact the lack of budget is having on consumers and other businesses across the state. Nevermind that issue of Exelon not paying the taxes they owe the state, while they made huge profits.

    So only the “smart” consumers win, while everyone else loses - sounds fair to me /s

    As for electricity - IL is an exporter, meaning we send more of it to other states. That’s why ComEd is in the PJM RTO, so they can sell our cheaper electricity for more money in that market. The issue is Exelon asked for a free-market, and now that their free market is working as well financially, they want a tax-payer funded bailout. How does that not make the budget situation worse?

  7. - Robert the Bruce - Friday, Oct 28, 16 @ 11:59 am:

    I suspect Exelon is well aware of the Illinois budget crisis, but they figure that they can outbid social service provider lobbyists in the quest for funding.

    “Steeper charges…for reducing consumption” may be my favorite part of this shameless application for corporate welfare.

  8. - Deuce - Friday, Oct 28, 16 @ 12:05 pm:

    Is it wrong of me to question the vitality of an article that alleges to have obtained damming evidence without actually producing the document? No new amendments or bills have been filed in Springfield that contain this language, none at all.

    So, yeah it’s possible this language exists, but without a sponsor to even file it… How is it even news?

  9. - Ggeo - Friday, Oct 28, 16 @ 12:10 pm:

    Suppy is Sully’s younger, less disciplined brother.

  10. - Todd - Friday, Oct 28, 16 @ 12:10 pm:

    While I haven’t looked at utility rates in other states, this seems to be just one more straw on the camels back that pushes me to be one of the 50%+ that want to leave the state.

  11. - unclesam - Friday, Oct 28, 16 @ 12:20 pm:

    Northside — “if generating plants close electricity costs will skyrocket…Supply (fixed) and Demand.”

    PJM — the regional operator of the ComEd territory — just released a report that Exelon’s QC nuclear plant is not needed for energy capacity or grid reliability because IL generates 40% more energy than it needs (and is a primary exporter of electricity).

    Basically, IL has too much SUPPLY for its current demand. Add to that the additional energy efficiency measures that this bill wants to utilize, that same could apply to the Clinton nuclear plant.

    So wouldn’t the “smart” thing to do is not allow IL residents to be charged extra for energy it doesn’t really need?

  12. - Relax - Friday, Oct 28, 16 @ 12:29 pm:

    People should judge this at the end of the day on what the bill actually looks like.

  13. - wordslinger - Friday, Oct 28, 16 @ 12:38 pm:

    What Earnest said.

    It’s a tax increase to pay for welfare for a highly profitable corporation.

    Call it what it is.

  14. - Going nuclear - Friday, Oct 28, 16 @ 12:40 pm:

    Once the Dynegy piece is added, it will be tough to sell this bill as a carbon reduction initiative. I think it will fragment the environmental community similar to the fracking legislation that was passed a few years ago, with many downstate grassroots groups opposed.

  15. - SportShz - Friday, Oct 28, 16 @ 12:44 pm:

    Exactly Earnest and Wordslinger

    Can you imagine all the campaign ads and mailers they could do on a “tax hike on your utility bill” and “corporate welfare for huge utility companies”?

  16. - Senator Clay Davis - Friday, Oct 28, 16 @ 12:48 pm:


    There’s a reason this is on the docket for Veto. Lots of members on their way out.

  17. - Frank - Friday, Oct 28, 16 @ 12:50 pm:

    Politics as usual did any of you really think it wouldn’t happen if so I have a gold mine I’d like to sell you in Springfield

  18. - JS Mill - Friday, Oct 28, 16 @ 1:07 pm:

    So this is pretty awesome. Excelon isn’t making enough money.

    Shouldn’t they just cut expenses? Live within your means, right?

    Oh, wait. That isn’t how it works in the (semi) private sector. Just charge more. /s

    I guess that is how it works for big business, with mega bucks lobbyists.

    I wonder if the bill sponsors understand how hypocritical this all is?

  19. - BEST Dave - Friday, Oct 28, 16 @ 3:20 pm:

    GGeo, yes, our new ad should be up top by now.

    “- NorthsideNoMore - Friday, Oct 28, 16 @ 11:43 am: “If gererating plants close elecricity costs will skyrocket… Suppy and Demand.”

    NorthsideNoMore, supply and demand is precisely the right question! SUPPLY - In 2015, IL generated 193,490,971 megawatt hours and used only 137,523,786, an excess of almost 56 million megawatt hours. So we have more than 40% excess capacity. Demand? Funny you should ask. Demand is down almost four percent since 2011 and almost six percent since 2007. So we have excess supply and declining demand. Prices are not going up.

    Finally, Deuce, the language exists. Lots of people including the reporter have seen it. Don’t know why you’d pretend it doesn’t exist.

  20. - Earnest - Friday, Oct 28, 16 @ 3:40 pm:

    On the bright side, higher electric rates will help IL attract more businesses. /s

  21. - wordslinger - Friday, Oct 28, 16 @ 3:53 pm:

    –I wonder if the bill sponsors understand how hypocritical this all is?–

    Nobody plays both sides of the aisle better than Exelon and ComEd.

    It’s not just the campaign contributions, but the jobs and “consulting” contracts they have to dish out.

    Plus, utility regulation is just mind-numbingly dull and esoteric; worse than the property tax assessment.

    But once their down spinning their message and doing the three-card-monte bit, you’re generally stuck with higher rates.

    In fact, a tax.

  22. - pronuke - Friday, Oct 28, 16 @ 4:06 pm:

    Illinois’ nuclear assets need supported not vilified because Exelon makes money. Why do you support wind and solar bailouts, but not nuke? I like it when my lights, a/c and heat work regardless of the weather and I’m willing to pay a few bucks extra for it, especially if it supports thousands of good paying jobs with no carbon dioxide or methane emissions.

  23. - proearth - Friday, Oct 28, 16 @ 4:17 pm:

    Illinois electrical supply is at a surplus largely from all the subsidized renewable build outs. How many good jobs are there in regards to renewable operations?…that’s right, not many. You say you want to leave Illinois because of bills like this, but losing that many jobs definitely won’t make things better.

  24. - BEST Dave - Friday, Oct 28, 16 @ 4:46 pm:

    Pronuke and Proearth, your facts are completely wrong. We have excess supply because in the 1970s and 1980s we overbuilt because integrated utilities made more money the more capital they invested. Our excess capacity is overwhelmingly coal and nuclear because they are the biggest energy sources. Don’t believe me? Fine, check the facts yourself.

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