* There have been three late updates to the Exelon/ComEd story we’ve been following.

First, ComEd will reportedly drop its complicated and unprecedented “demand rates” scheme at a noon meeting today. The proposal was characterized by the governor’s office yesterday as “insane rates.”

Second, I’m told that the subsidy for coal-fired power plants will likely be dumped.

Third, enviros are saying the best way to satisfy the governor’s demand that ratepayers not be socked with huge increases to subsidize Exelon’s unprofitable nuke plants is to move forward with an ambitious energy conservation program. Ameren has not been happy with that, however. So, we’ll see.

* Plus, there’s this…

NRDC estimates that the savings from efficiency outnumber the costs by about 3 to 1.

But advocates for large commercial users counter that, with energy costs a major concern, industrials have been investing in efficiency for years—well before it became a cause celebre in the age of climate change. They are resentful that they’re being asked to pay so much more for programs controlled exclusively by the utility that likely will benefit peers and competitors that haven’t invested as much in saving electricity.

IMA’s Denzler says manufacturers want the ability to opt out of the utility program and pursue their own initiatives, which they can do in Illinois to comply with requirements to reduce natural gas consumption. The bill doesn’t currently allow for that.

Also raising the costs for power consumers, both commercial and residential, is that ComEd would be allowed for the first time to earn a profit from administering the efficiency programs. Under current law, ComEd recovers its costs via a surcharge on customer electric bills but isn’t permitted to earn a return.

Neme, representing NRDC, says more-efficient use of electricity benefits all customers, whether they participate directly in the programs or not, by holding down prices and lowering their bills. Efficiency gains are a particularly potent price suppressor if they take hold at peak-demand times like hot summer afternoons. “That’s the challenge of efficiency,” he says. “The benefits don’t show up on your bill in as visible a way as the costs do.”

* More specifically, here’s how the company gets its money…

Under existing law, ComEd collects money from ratepayers to help support energy efficiency efforts. If a consumer decides to upgrade to a new thermostat, for example, those dollars allow ComEd to provide a rebate to help defray the cost. Currently, it’s a pay-as-you-go system with ratepayer dollars being doled out as needed.

The proposed change would allow ComEd to instead finance those costs on behalf of ratepayers, and collect a management fee and interest in the process.

Illinois Attorney General Lisa Madigan’s office has likened it to forcing customers to take out a mortgage they don’t necessarily want. Cara Hendrickson, an attorney in Madigan’s office, told a panel of lawmakers last week that the provision would, for the first time, allow utility companies to build profits into the energy efficiency program.

“Of the $3.6 billion in additional spending (on energy efficiency), roughly $1 billion of that would go exclusively to profit,” Hendrickson said. “We don’t think that is a good use of ratepayer dollars.”

The governor’s office, you may recall, said yesterday that it supports conservation efforts.

*** UPDATE 1 ***   Press release…

Experts on Illinois energy issues will hold a teleconference Tuesday morning to emphasize the role that energy efficiency would play in lowering the bills for residential, institutional and commercial customers under legislation being considered by the Illinois General Assembly.

The Natural Resources Defense Council (NRDC) commissioned an analysis with energy efficiency experts which points to $7 billion in savings under the bill.

During hearings held last week and in other public statements, many lawmakers suggested that the scope of the legislation might need to be scaled back, singling out the bill’s support for coal plants and potential changes to rate design as two areas that might need to be changed.

Scheduled to join in the teleconference will be representatives of the NRDC, Citizens Utility Board (CUB) and the Illinois Chapter of the Sierra Club. They will point out that the savings, while significant, would only be available to customers in ComEd’s service territory, and will urge Ameren Illinois to make similar commitments to deliver savings to its customers in Central and Southern Illinois.

*** UPDATE 2 *** From a senior Rauner administration official…

The following is a quick readout from this morning’s productive discussions between Exelon and ComEd senior leadership and senior Rauner Administration leadership.

Exelon and ComEd agreed to remove demand rates and keep the plants open for at least 10 years, potentially 12 years. Following intense discussion regarding potential energy price spikes for both consumers and large employers, Exelon and ComEd committed to working with Ameren on inserting a guarantee into the legislation that would by law protect both consumers and large employers from any significant rate increase.

There are some remaining skeptics, however, so don’t get the champagne out yet.

…Adding… Some headlines were changed as clarity emerged. There’s a “commitment to work on putting a guarantee in a bill” that would cap rates. However, there’s no language yet. And as mentioned directly above, there are still opponents.

*** UPDATE 3 *** Hearing word of a very loud shouting match and real trouble on the deal.