* Background is here if you need it. From the Iowa Supreme Court…
In this appeal, we must decide whether the district court correctly ruled that qualified would-be competitors in the electric transmission market lacked standing to challenge new legislation that blocks them from bidding against existing Iowa operators on future projects. The statute at issue, Iowa Code section 478.16 (2020), grants “incumbent” Iowa [electric utilities] a right of first refusal (ROFR) that forestalls competitive bidding. […]
We are not surprised the ROFR lacked enough votes to pass without logrolling. The provision is quintessentially crony capitalism. This rent-seeking, protectionist legislation is anticompetitive. Common sense tells us that competitive bidding will lower the cost of upgrading Iowa’s electric grid and that eliminating competition will enable the incumbent to command higher prices for both construction and maintenance. Ultimately, the ROFR will impose higher costs on Iowans. The data back this up: amicus Coalition of MISO Transmission Customers offers data collected from two recent bid-based projects that indicate competition reduces costs by fifteen percent compared to MISO’s estimates. As the Coalition summarizes, “Without competition, there are fewer checks and balances on cost estimates, and no pressures or incentives to curb project costs and prevent cost overruns.”
Both Illinois chambers approved a similar bill at the 11th hour last week that would hand Ameren the right of first refusal to build regional electricity lines. You’ll recall that this “quintessentially crony capitalism” and “protectionist” legislation was fervently backed by Rep. Chris Miller (R-No Relation) during floor debate.
* This is how Ameren pitched the bill in Missouri, its home state…
In states with right-of-first-refusal laws, these LRTP projects can begin as soon as they are approved by MISO, but that won’t be the case in Missouri unless HB 992 is passed by the General Assembly and signed into law by the governor. Without the Missouri First Transmission Act, these projects will be forced to go through a lengthy bid process that could take up to two years to complete — putting Missouri behind schedule when it comes to these important transmission projects.
The legislation did not pass.
* Capitol News Illinois…
Critics of the proposal said that it would reduce competition, leading to higher costs for construction projects and ultimately higher costs to energy consumers. But proponents said that it will streamline the billions of dollars of construction planned for the coming years while creating union jobs for Illinoisans. […]
While it needs only a signature from Gov. JB Pritzker to become law, he vowed last week to veto the bill. Pritzker spokesperson Alex Gough said the governor opposes the bill because it “puts corporate profits over consumers.”
The legislature could override Pritzker’s potential veto, but it would require three-fifths majorities in both chambers, a margin that it earned in the Senate, but not the House. […]
The bill’s house sponsor and the House Public Utilities Committee chair, Rep. Larry Walsh, D-Elwood, said that the proposal came to him from the union. In a Friday evening committee, Walsh said it would streamline the process of expanding the grid.
“If you have an entity that controls the transmission of our electric power throughout whatever region you’re in… It’s easier for them to do this type of work, interconnecting their system,” Walsh said.
* Crain’s…
Interestingly, the bill applies only to Ameren Illinois, which serves downstate Illinois, and not Commonwealth Edison. Ordinarily, the IBEW, which represents thousands of workers at both utilities, would have pushed to favor both companies.
But ComEd’s admission of an elaborate bribery scheme aimed at currying favor with former House Speaker Michael Madigan, and the recent convictions of the so-called “ComEd Four,” including former ComEd CEO Anne Pramaggiore, on conspiracy and bribery charges, led backers to focus only on Ameren.
Where things go from here is uncertain. Pritzker left no doubt he would veto the bill. Once that happens, Welch and Harmon will have to decide whether to try to override a fellow Democrat — a rarity during Pritzker’s five years in the governor’s mansion. […]
IBEW has pushed for bills giving incumbent utilities the “right of first refusal” on new transmission in states all over the U.S. and have been successful in more than 10. Indiana passed a similar law earlier this month, while Missouri lawmakers rejected a similar proposal.
…Adding… Sun-Times editorial…
In a sneaky maneuver, the Legislature slipped through a Senate amendment that would give the downstate energy utility Ameren monopolistic control over anyone building regional power lines across its territory. Such an enormous corporate giveaway could make it harder and more expensive to decarbonize the state’s and nation’s power grid just when it is crucial to connect new renewable energy sources, such as wind and solar power installations, to customers in population centers.
The regional power lines Ameren could control possibly would include those that would connect the Chicago area to new solar and wind energy. But Ameren has an apparent conflict of interest: its parent company owns fossil fuel plants that generate electricity.
We’re not saying we know what Ameren would do, but slow-walking any new regional power lines appears as though it could be in its financial interest. And, as in all situations in which a company gains monopoly power, there is a risk of customers paying unnecessarily high prices for less service.
