Capitol Fax.com - Your Illinois News Radar » *** UPDATED x1 *** CEJA will bring $1 billion windfall to ComEd customers, but Ameren’s rejection means Downstaters will see big energy price spikes
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*** UPDATED x1 *** CEJA will bring $1 billion windfall to ComEd customers, but Ameren’s rejection means Downstaters will see big energy price spikes

Wednesday, Apr 27, 2022 - Posted by Rich Miller

* Steve Daniels

Households and small businesses that get their power from Commonwealth Edison will be unprotected from commodity price spikes in the high-demand summer months unless state regulators take fast action.

For the first time in the 14 years since the state took over the job from utilities of negotiating with power generators, the Illinois Power Agency was unable to reach an agreement on an electricity price in northern Illinois for the entire months of July and August, as well as part of June. […]

But ComEd customers won’t feel the increase in their wallets, thanks to the way the Pritzker administration structured a separate ratepayer bailout for Illinois nuclear plants now owned by Baltimore-based Constellation Energy Group.

In June, customers would have started paying about $2 extra on their bills to support the plants under the Climate & Equitable Jobs Act, or CEJA, enacted last year. But, with energy prices soaring, the subsidy will instead become a credit beginning next month.

* ICJC…

Today, utility Commonwealth Edison filed new rates with the Illinois Commerce Commission that will provide direct credits of more than $1 billion to customers as a result of the Climate and Equitable Jobs Act (CEJA) that was signed into law last fall.

The Illinois Clean Jobs Coalition (ICJC), whose advocacy over several years was instrumental in passing the nation-leading legislation, released the following statement:

“At a time when electricity costs are skyrocketing across the country, Governor Pritzker negotiated protections against price spikes that mean electricity prices for ComEd customers will actually be going DOWN. For families struggling with the high cost of inflation, this is welcome relief. What could have been a nuclear subsidy was smartly negotiated into a billion-dollar bonanza for Illinois consumers.

“The deal shows the wisdom of Illinois’ approach to combat the climate crisis and create good-paying, equitable clean energy jobs, while saving money for consumers. […]

The “Carbon Mitigation Credit” program, created under CEJA, provides revenue certainty to three Illinois nuclear power plants, and was originally expected to potentially cost ComEd customers $700 million over the 5-year life of the program. The deal was structured, however, so that if wholesale electricity prices increased above a certain level, the nuclear plants would owe money instead. Since the Russian invasion of Ukraine, electricity prices have risen dramatically across the country.

As part of the deal, residential customers will see an average credit of $18/month starting in June through next May, as a separate line item on their bill. ComEd customers have not paid any money to the nuclear plants to date, and current electricity price forecasts show the customer credit will continue for at least the next several years.

* Ameren opted out of the Carbon Mitigation Credit program and its consumers will pay a steep price. Back to Steve’s article

So central and southern Illinoisans will experience directly the brunt of an even more dramatic power-price spike down there. Their costs for energy will roughly double beginning June 1

* Back to the ICJC’s release…

We wish that Central and Southern Illinois consumers were also receiving this windfall, but Ameren chose not to participate in the Carbon Mitigation Credit program. […]

In a mistake that will cost their customers dearly, Ameren, the utility that serves most of Central and Southern Illinois, refused to join the Carbon Mitigation Credit program. As a result, their customers will see painful hikes in their electricity bills like consumers all over the Midwest.

*** UPDATE *** Ameren…

Ameren Illinois Statement on False Claims About Carbon Mitigation Credit Program

April 27, 2022

The statement issued today by the Clean Jobs Coalition is blatantly false. Ameren Illinois was never involved in the negotiations of the Carbon Mitigation Credit and was never given an option to opt in or out. In fact, throughout the process of negotiating the legislation, it was publicly stated by numerous CEJA members and supporters that the utilities would not be involved in crafting the new law.

This Carbon Mitigation Credit provision was written specifically to subsidize the Exelon nuclear facilities in Chicago, which are in a separate energy market from downstate. Again, the legislation specifically applies to “electric utilities serving at least 3,000,000 retail customers” in the state. Ameren Illinois has 1.2 million customers.

This policy was written specifically to benefit to Exelon nuclear plants in Chicago.

       

15 Comments
  1. - Ok - Wednesday, Apr 27, 22 @ 12:49 pm:

    This is massive. Props to Speaker Welch and Able Gabel as well. But major credit due to the Governor and Christian.


  2. - Grandson of Man - Wednesday, Apr 27, 22 @ 1:06 pm:

    Certainly don’t rejoice in this happening, but do support a cleaner environment. Choices have consequences. Residents and businesses who will pay more should push to be included, if possible (amend the law?).


  3. - Perrid - Wednesday, Apr 27, 22 @ 1:30 pm:

    I’m going to be honest and say I have no idea what these programs are or do, but I’m just generally unhappy with the world at large that my “costs for energy will roughly double beginning June 1″


  4. - Google Is Your Friend - Wednesday, Apr 27, 22 @ 1:40 pm:

    - Perrid - Wednesday, Apr 27, 22 @ 1:30 pm:

    https://www.ameren.com/company/about-ameren/executive-leadership

    Correspondence Mailing Address
    Ameren Illinois
    300 Liberty
    Peoria, IL 61602


  5. - Curious - Wednesday, Apr 27, 22 @ 2:02 pm:

    How will CWLP ratepayers and other municipal power customers be affected by the rate spikes?


  6. - Fixer - Wednesday, Apr 27, 22 @ 2:09 pm:

    “Their costs for energy will roughly double beginning June 1″

    Fantastic… I guess getting solar panels will be cheaper than this pretty soon.


  7. - thechampaignlife - Wednesday, Apr 27, 22 @ 2:10 pm:

    I have a finance background and decent understanding of most topics covered in Capitol Fax, enough to follow along, but this business about being unprotected from commodity price spikes while getting a credit because energy prices shot up has me confused. If I am confused, the average ratepayer will be confused.

    What worries me is how long this credit business will last, how it impacts the sustainability of the nuclear plants if they are paying subsidies instead of receiving them and are netting less profits than nuclear in other states or non-nuclear elsewhere, and what the Carbon Mitigation Credit cost will be for ratepayers when this shifts back to a cost instead of a credit.

    Maybe it has all been thought through and there is nothing to worry about. But knowing our history of long-term decision-making, I have worries.


  8. - TheInvisibleMan - Wednesday, Apr 27, 22 @ 2:11 pm:

    “electricity prices for ComEd customers will actually be going DOWN”

    In a similar manner to “Citadel Securities has never worked with Mayor Irvin”…. but Citadel Investments might have…

    ComEd electricity prices are going down. Emphasis on *prices*. Other details that have been out for a few weeks also show ComEd will be increasing their electricity *delivery* rates by I believe twice this amount.($2B)


  9. - Publius - Wednesday, Apr 27, 22 @ 2:30 pm:

    I wish the rest of the state could get rid of AMEREN and just go to ComEd. Then the under utilitztion of their generation could be of use to the rest of the state.


  10. - JLW - Wednesday, Apr 27, 22 @ 4:42 pm:

    –I wish the rest of the state could get rid of AMEREN and just go to ComEd. Then the under utilitztion of their generation could be of use to the rest of the state–

    I am guessing you are trying to say that you wish all of Illinois was in PJM instead of MISO? Neither company has any generation.


  11. - Whoops - Wednesday, Apr 27, 22 @ 5:20 pm:

    Didn’t the Governor specifically exclude utility customers from participating in the negotiating process? CEJA best tread lightly or expose the Governor to the future political attacks of hyper market driven energy prices.

    Meeting adjourned,
    The Chairman


  12. - Lester Holt’s Mustache - Wednesday, Apr 27, 22 @ 5:33 pm:

    ==CEJA best tread lightly or expose the Governor to the future political attacks ==

    JB is going to get hammered for this rate hike anyway. He’s not going to be able to convince millions of people, even reliable Dem voters, that doubling their energy rates a few months before the election is a good thing regardless of whatever nebulous environmental gains result from CEJA. Margins matter in statewide races, and JB was facing a lot of headwinds to begin with.


  13. - NonAFSCMEStateEmployeeFromChatham - Wednesday, Apr 27, 22 @ 6:14 pm:

    Interestingly, the Peoria Journal Star already has a story about the Ameren rate hikes. But the world infamous SJR is asleep at the wheel. Not even trying to add parts about how CWLP will be affected. Instead they are too focused on the latest restaurant opening and plans for an additional Green Hyundai store in Springfield instead of reporting on important news that truly impacts people’s lives and wallets.

    https://www.pjstar.com/story/news/2022/04/27/peoria-ameren-electricity-bills-higher-summer-heres-why/7368627001/


  14. - DuPage - Wednesday, Apr 27, 22 @ 9:41 pm:

    Interesting article points out that closed coal mines emit large amounts of methane. It suggests capture and burning the methane to generate electricity. They claim the methane is over 30 times more damaging to the environment then the CO2 that would be produced by burning it. If this is true, changes in the law to allow burning methane should be enacted. When that big coal mine in southern Illinois closes down, what is going to happen to all that methane?

    https://www.bloomberg.com/news/articles/2022-04-26/methane-gas-business-hopes-to-make-abandoned-mines-greener


  15. - DuPage - Wednesday, Apr 27, 22 @ 10:02 pm:

    I misheard something on the interview in the article. I thought they said CH4 was 82% more damaging then CO2. They actually said CH4 is 82 TIMES as damaging as CO2.


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