Capitol Fax.com - Your Illinois News Radar

Pritzker unveils his energy bill draft

Posted in:

Illinois

Exelon customers would be on the hook for $694 million in higher subsidies to keep three Illinois nuclear plants afloat under a sprawling, revised green-energy package that surfaced late Thursday and could be voted on by state lawmakers next week.

The 866-page omnibus pushed by Democratic Gov. JB Pritzker could move one of the major unresolved issues from the spring legislative session closer to fruition and would fulfill a Pritzker campaign pledge to reduce the state’s reliance on fossil fuels if it prevails.

But equally significant, the measure, if it passes, could hand the state’s most powerful utility company a financial boost even as its corporate subsidiary, Commonwealth Edison, remains at the center of a still active federal criminal investigation that cost former Illinois House Speaker Michael Madigan his job earlier this year.

The plan would phase out coal use in Illinois by 2035 and natural gas by 2045 and authorize $4,000 rebates for purchasers of electric vehicles as part of a strategy aimed at getting 1 million of those vehicles on Illinois roads by 2030.

The legislation also would end a controversial ratemaking formula that delivered windfall profits to ComEd, which last year acknowledged engaging in a long-running bribery scheme to curry favor with Madigan by showering no-work jobs and contracts on his close associates. Madigan has not been charged.

* I shared the the governor’s office memo with subscribers last night along with the draft legislation and another draft that’s floating around. Here’s the memo…

To: Members of the Energy Legislative Working Group and Invited Stakeholders From: Governor’s Office
Date: June 10, 2021
Re: Omnibus Energy Bill

Dear Members,

In response to the statement made by the Senate President that the legislature would return to take up the energy bill negotiated by Governor Pritzker, the Governor’s Office worked with the Clean Jobs Coalition and other stakeholders to revise the May 31 energy draft to include key missing pieces – like decarbonization – and make page and line edits to ensure that the programs can be implemented by the relevant agencies. This memo summarizes the changes in the accompanying LRB draft and provides an overview of the legislation itself, including areas of agreement reached by the legislative working group.

Also highlighted are the measures in the bill that pertain to the Prairie State Energy Campus, which remains subject to the declining caps on greenhouse gases. An exemption for the nation’s seventh largest polluter remains unacceptable to the Governor, as well as the nearly 50 legislators that have indicated they will not support a bill that does so.

The Governor stands ready to sign this bill should the General Assembly choose to pass it next week in Springfield.

As we have said all along, Illinois can and must lead on clean energy, and it must lead in the light of day—ethically, honestly, and toward the collective goal of empowering Illinoisans to lead the United States in transitioning to a clean energy economy. We look forward to discussing tomorrow at 10 AM and then returning to Springfield next week to support passage of a bill that protects consumers and the climate.

Summary of Changes in the Attached LRB Draft:

• Decarbonization: phases out coal by 2035 and natural gas by 2045 through declining caps on greenhouse gas emissions, prioritizing equity investment eligible communities and dedicating $2M/year in ratepayer funds to fund Prairie State’s 2035 decommissioning costs.
• Prairie State Transition Task Force: creates a new task force to investigate carbon capture and sequestration and debt financing options for Prairie State and affected municipalities (request of affected legislators).
• Restitution docket: requires the ICC to initiate an investigation into how ratepayer funds were used in connection with the conduct outlined in ComEd’s Deferred Prosecution Agreement, and requires that any funds used in furtherance of DPA covered conduct be remitted to ratepayers.
• Tax repayment: requires the ICC to initiate a docket to provide for the refunding of excess deferred income taxes by the end of 2025.
• Beneficial electrification plans: modifies language around transportation plans that utilities must file with the ICC to better support investment in equity investment eligible communities and support for medium-duty and heavy-duty buildout.
• CHP: includes support for combined heat and power (CHP) and waste heat to power (WHP) in the definition of distributed renewable energy generation device and renewable energy resources, as requested by manufacturers and large industrials.

Full Summary of Bill:

Ethics:

• Expands statement of economic interest requirements to include any spouse or immediate family member employed by a public utility in Illinois.
• Subjects the Illinois Power Agency to ex-parte communication requirements.
• Creates a Public Utility Ethics and Compliance Monitor to ensure utility companies are
meeting the highest level of ethical standards.
• Requires the ICC to initiate an investigation into how ratepayer funds were used in
connection with the conduct outlined in ComEd’s Deferred Prosecution Agreement, potentially putting refunds back into residential ratepayers’ pockets.

Consumer Protections:

• Eliminates the customer deposit requirement and late fees for low-income utility residential customers.
• Eliminates the online payment fee for all customers’ utility bills.
• Requires utility companies to accurately report to the ICC on the number of shutoffs and
reconnections on a monthly basis.
• Provides utility-funded compensation to non-profit representatives of consumer
interests that intervene in ICC proceedings in order to increase public engagement and
transparency, expand information available to the ICC, and improve decision-making.
• Requires the ICC to conduct a comprehensive study to assess whether low-income
discount rates for residential customers are appropriate and the design and
implementation of such rates.
• Requires the ICC to initiate a docket to provide for the refunding of excess deferred
income taxes by the end of 2025, putting around $0.08/month back in residential
ratepayers’ pockets.
• Makes changes to the Energy Assistance Act (same provisions as Chairman Hastings’
initiative, SB 265).

Decarbonization:

• Phases out coal by 2035 and natural gas by 2045 through declining caps on greenhouse gas emissions, prioritizing equity investment eligible communities and dedicating $2M/year in ratepayer funds to fund Prairie State’s 2035 decommissioning costs
• Provides $694 million in financial support over 5 years for the Byron, Dresden, and Braidwood nuclear plants, which will also keep the LaSalle nuclear plant viable and cost the average residential ratepayer an estimated $0.80/month. This subsidy fits within the parameters of Synapse’s independent assessment.
• Creates a coal to solar program to support the transition of coal plants to renewable energy facilities.
• Requires utilities to implement a public schools carbon-free assessment program.
• Authorizes the Governor to create a commission on market-based carbon pricing
solutions.
• Creates a Prairie State Transition Task Force to investigate carbon capture and
sequestration and debt financing options for Prairie State.

Renewable Energy:

• Provides that it is the policy of the State to move toward 100% clean energy by 2050.
• Makes changes to the Illinois Power Agency Act to double the state’s investment in
renewable energy, put the state on a path to 40% renewable energy by 2030, and shift to indexed Renewable Energy Credits, costing residential ratepayers around $1.22/month.
• Requires prevailing wage on all wind and solar projects, except for single-family and multi-family residential buildings and allows a 5-year exemption from prevailing wage for equity eligible contractors.
o NOTE: This section was previously drafted with an understanding between labor, equity advocates, and the Black and Latino Caucuses and is currently under review. The Governor’s Office remains ready to assist in developing solutions that ensure the renewable energy industry reflects the diversity of the state and leads to good-paying, union jobs for all.
• Requires project labor agreements on all utility-scale wind and solar projects.
• Requires the ICC to initiate an energy storage proceeding.
• Allows the ICC to grant a certificate of public convenience and necessity to construct,
operate, and maintain a qualifying direct current project.
• Requires the ICC to open an investigation to develop and adopt a renewable energy
access plan to achieve transmission capacity to support renewable energy expansion.

Ratemaking:

• Ends formula rates and transitions to performance-based ratemaking.
• Requires an independent audit of the current state of the grid and expenditures made
since 2012.
• Allows utilities to file a Multi-Year Rate Plan (MYRP) where they will be rewarded and
penalized based on achievement of ICC-approved performance metrics, which will be based on reliability and resiliency, peak load reductions attributable to demand response programs, supplier diversity expansion, affordability, interconnection response time, and customer service performance. This will help align utility performance with state public policy goals.
• Requires annual performance evaluations to evaluate utilities’ performance on their metric targets during the previous year.
• Requires utilities to file a Multi-Year Integrated Grid Plan to support the state’s clean energy goals, providing additional transparency to the ICC and stakeholders, and overall comprehensive grid planning. This is required whether a utility files an MYRP or traditional rate case.
• Creates a new Division of Integrated Distribution Planning at the ICC.
Workforce Development:
• Creates the Energy Transition Assistance Fund to allocate funding from ratepayers to support around $215 million in state clean energy programs.
• Allows local governments to engage in community energy and climate planning.
• Creates a displaced worker bill of rights, administered by DCEO and IDES, to provide
state support to transitioning energy sector workers.
• Requires plant owners to provide written notice of a plant closure to DCEO and
community leaders and provide assistance to impacted communities through displaced energy worker dependent transition scholarships, an energy transition barrier reduction program, and just transition grants to promote economic development in eligible communities.
• Creates a Clean Jobs Workforce Network Hubs Program, establishing 13 program delivery hub sites that leverage community-based organizations to ensure members of equity-focused populations have dedicated and sustained support to enter and complete the career pipeline for clean energy and related sector jobs.
• Requires DCEO to develop a Climate Works Pre-apprenticeship Program and provide funding to three Climate Works Hubs throughout the state which will recruit, prescreen, and provide pre-apprenticeship training to equity focused populations.
• Creates a clean energy contractor incubator program to provide access to low-cost capital and financial support for small clean energy businesses and contractors
• Creates a returning residents clean jobs training program to provide training for careers in the clean energy sector to individuals who are currently incarcerated
• Creates a clean energy primes contractor accelerator program to mentor and support businesses and contractors through business coaching and operational support
• Creates a jobs and environmental justice grant program to provide upfront and seed capital to support community ownership and development of renewable energy projects
• Establishes the Energy Workforce Advisory Council within DCEO to make recommendations to the state on clean energy workforce programs

Climate Financing:

• Designates the Illinois Finance Authority as the climate bank and allows the Authority to aid clean energy efforts by providing financial products and programs to finance and otherwise develop and implement clean energy.
• Creates a clean energy jobs and justice fund and board to finance and support clean energy investments.
Just Transition:
• Creates an Energy Transition Workforce Commission to report on the anticipated impact of the energy transition and recommend changes to the workforce through 2050.
• Requires DCEO to establish a grant program to award grants to promote economic development in eligible communities.
• Requires DCEO, in collaboration with IDES, to implement a displaced worker bill of rights that provides benefits to displaced energy workers, including notice of a plant closure.
• Requires DCEO to administer a transition scholarship program to support youth who are deterred from attending or completing an educational program at an Illinois institution of higher education because of his or her parent’s layoff from a retiring power plant.
• Requires DCEO to create or commission a report on the energy worker and transition programs.
• Allows a local unit of government to establish Community Energy and Climate Plans, which are intended to aid local governments in developing a comprehensive approach to combining different energy and climate programs and funding resources.
• Requires plant owners to notify employees and public officials of a plant closure two years in advance.
Transportation:
• Increases the adoption of electric vehicles in the state to 1,000,000 by 2030.
• Requires electric utilities to file beneficial electrification plans with the ICC.
• Requires IEPA to award rebates or grants that fund up to 80% of the cost of the installation of charging stations and requires recipients to pay prevailing wage on installation projects.
• Requires IDOT to conduct a study to consider how the adoption of EVs will adversely
affect resources needed for transportation infrastructure.
• Creates an up to $4,000 rebate for consumers who purchase an electric vehicle.
Energy Efficiency:
• Requires CDB, in consultation with DCEO, to create and adopt a stretch energy code to allow municipalities and projects authorized or funded by CDB to achieve more energy efficiency in buildings than the Illinois Energy Conservation Code.
• Establishes a process for setting cumulative annual savings goals for utilities through 2040 and expands low-income weatherization efforts, costing residential ratepayers around $0.86/month.
• Allows large private energy customers to opt out of energy efficiency programs, and instead report its plans to reallocate funding toward internal energy efficiency efforts.
• Requires public utilities to adopt an Equitable Energy Upgrade Program to permit customers to finance the construction of energy projects through tariffs on their bills.

Some of those changes could be tough to pass with a three-fifths vote. We’ll see.

posted by Rich Miller
Friday, Jun 11, 21 @ 3:22 am

Comments

Unless I missed it (which is likely as I’m half-awake right now), nothing in this draft for municipal untilites, like CWLP? Meaning Prairie State gets support but Dallman 4 is still on track to be shut down by 2035?

Comment by EssentialStateEmployeeFromChatham Friday, Jun 11, 21 @ 4:58 am
Ultimately this will cost consumers. And I am an advocate of renewables but this can’t be rushed

Comment by Blue Dog Friday, Jun 11, 21 @ 6:22 am
I mean, the vast majority of this stuff has been in legislation being discussed for the better part of two years. Hard to say it is being rushed if you just haven’t been paying attention.

Comment by Ok Friday, Jun 11, 21 @ 7:01 am
Is the LRB Draft ONLY available at this time to the working group members and invited stakeholders??? It would be nice if the public could start reviewing this over the weekend to become more informed as well. For instance, from the memo- “Allows the ICC to grant a certificate of public convenience and necessity to construct, operate, and maintain a qualifying direct current project.” This sounds an awful lot like eminent domain. What kinds of direct current projects are we talking about here? Are non-public utilities, such as some renewable projects, now going to be granted the title of “public utility”, and receive all the perks that definition may entitle them to in various other pieces of legislation, law, and agency permitting?

Comment by Anon221 Friday, Jun 11, 21 @ 7:33 am
What are the implications of this energy policy for road maintenance? Transitioning from gasoline to electric automobiles creates a significant reduction in gasoline tax revenue used for road maintenance. How will the owners of EVs provide their share to keep roads in good shape?

Comment by Old Illini Friday, Jun 11, 21 @ 8:23 am
– this can’t be rushed. —

I assume that Greta Thunberg would disagree.

Comment by Oxfordian Friday, Jun 11, 21 @ 9:09 am
Old Illini,

=How will the owners of EVs provide their share to keep roads in good shape?=

Good question. I can think of two possibilities that can even coexist. First, as the charging station infrastructure is built out, a per unit (Think watts) tax could be implemented similar to the motor fuel tax (per gallon). However, that doesn’t address people charging at home.

Therefore the second possibility is a mileage tax for EVs. It could be paid when you renew your vehicle registration by claiming the mileage with a legal attestation (with penalties for fraudulent claims). Change in ownership could be done on a prorated basis similar to property taxes. I know this is controversial, but all drivers should financially support the cost of maintaining our transportation infrastructure. This would also cover fleet vehicles that are charged by a company.

With both options implemented, many out-of-state drivers would be taxed when using charging stations around the state. Some, like residents across the border in other states, might avoid paying a charging tax in IL, but that happens now with fuel.

Comment by Steve Polite Friday, Jun 11, 21 @ 9:27 am
Lack of tax revenue is not the only road maintenance issue with EVs. They are HEAVY, especially the trucks. So widespread adoption of them will create more road maintenance cost.

Comment by Captain Obvious Friday, Jun 11, 21 @ 9:34 am
==What are the implications of this energy policy for road maintenance? ==

Especially in the Springfield area which in my opinion has one of the worst quality roads and highway infrastructure layout in the entire state. Too much cheap “Uncle Bill’s Bleepin’ Golden Cheap Asphalt” or whatever asphalt they used on Springfield-area roads that gives us its first pothole about a few days after construction.

Comment by EssentialStateEmployeeFromChatham Friday, Jun 11, 21 @ 9:53 am
To a mileage tax… what about turning in your miles but you drive 30 or 40 percent outside of Illinois?

Overall this feels rushed - to CWLP, how does this impact the sequestration project that is slated to begin? Decatur and Broadwing Energy is going to be a “carbon free” natural gas plant. The push to totally run away from these existing plants doesn’t make much sense right now. New technology is on the way to see if we can clean up these coal plants. Those projects need a home and they should be in Illinois. They will support jobs, launch companies and also still support existing coal mining jobs in Illinois while the research is going on.

Comment by Cool Papa Bell Friday, Jun 11, 21 @ 10:26 am
It’s not easy being dragged into the 21st century…

Comment by VerySmallRocks Friday, Jun 11, 21 @ 10:26 am
I’m hoping there’s provisions to allow Prairie Campus subscribers to exit their agreement based on the public interest of it being a dodgy deal to begin with, as well as a force majeure clause of climate crisis. The Campus will scramble to find other subscribers, but they can only lose so much money for so long before they’ll close it, maybe even before 2035.

Comment by VerySmallRocks Friday, Jun 11, 21 @ 10:31 am
= Some of those changes could be tough to pass with a three-fifths vote. =

Agreed. As long as the legislation isn’t written with an effective date prior to June 1, 2022, it can still pass with a simple majority.

Comment by cover Friday, Jun 11, 21 @ 10:39 am
Cool Papa Bell,

=what about turning in your miles but you drive 30 or 40 percent outside of Illinois?=

That’s another good question. I don’t have a good answer. The idea is to create revenue from EV drivers in Illinois to support the damage done and improvements to Illinois’ infrastructure. Maybe the mileage tax could be lower to compensate for out of state driving and the charging tax in state would be higher? I’m not sure if that’s the best solution though.

Comment by Steve Polite Friday, Jun 11, 21 @ 10:41 am
In addition to a mileage charge, there should be conversion of the interstates to toll roads, which can be allowed if there is substantial enough rebuilding. I regret that the concept of “free driving” was not one of the commandments etched into Charlton Heston’s tablets on Mt Sinai.

Comment by VerySmallRocks Friday, Jun 11, 21 @ 10:57 am
@Steve - Yeah its a tricky biscuit. I can generally back a mileage tax but its near impossible to implement without a GPS device in your car that logs your miles and location (kinda feels like a non-starter).

A little known fact of EV’s right now is they are heavier than the gas cars they are replacing. Now we aren’t talking semi level weight here. But a Tesla S weighs 4,941 pounds and a Toyota Avalon weighs 3,715. What will those impacts be on roadways?

Comment by Cool Papa Bell Friday, Jun 11, 21 @ 10:59 am
Mileage based tax has a couple pilots going on, just not in Illinois. It’s not as easy of a collection method as the current model (fuel tax) so the rate would need to be higher to offset the additional administrative overhead. Although the current rate has not kept up with the increased cost of services that the tax is supposed to support. Maybe a MBT will get a pilot in Illinois sooner rather than later?

As for EV’s not paying their fair share, there was a little bump in 2019 legislation to make up some of the difference that people may be forgetting. Vehicle registration fee for an EV went from $30 per two years to $100 above the passenger vehicle rate per year (so currently that’s $251).

Comment by From DaZoo Friday, Jun 11, 21 @ 11:14 am
I understand Exelon’s demand for subsidies, and I understand the Governor’s desire to be a national leader on this. But what makes no sense is that the negotiators seem to want to ignore this requires a national solution and the President is working on one. Why push through a bill that will absolutely increase rates for all consumers when you still don’t have a full picture of what’s going to happen at the federal level.

Comment by snark encouraged Friday, Jun 11, 21 @ 11:25 am
Perhaps our IL-1040 forms can have a box for mileage tax, just like the internet tax, since that worked so well.

Comment by Steve Rogers Friday, Jun 11, 21 @ 11:32 am
Guessin’ Trump DOJ/ComEd(nee Griffin lawyer et.al. have signed off too? Why not toss up 30/60 and let ComEd wait for their windfall?

Comment by Annonin' Friday, Jun 11, 21 @ 11:34 am
The big question to me remains- how are they going to charge all those cars?

Comment by Friendly Bob Adams Friday, Jun 11, 21 @ 11:53 am
[previous post in limbo] Just as a reminder…
1. There are a couple MBT (mileage based tax) pilots in the USA. There’s bit more overhead in the operation of it as compared to the current fuel based tax. There was pilot discussed for Illinois a couple years ago but the people who brought it up didn’t do enough groundwork before surprising people with the idea. Maybe by 2030?

2. Seems people have forgotten 2019 legislation that raised the EV registration to $100 over a regular passenger car registration. This doesn’t completely capture the difference but it is something.

Comment by Anonymous Friday, Jun 11, 21 @ 12:05 pm
Anonymous @ 12:05 was me.

Comment by From DaZoo Friday, Jun 11, 21 @ 12:08 pm
A suggestion: For all electric vehicles, I would suggest a toll-fee at the entrance and exit of the Interstate. A camera at the toll places would take a picture of one’s license plate and send you a bill. New license’s plates should have a computer chip coded as to whether the vehicle is gas or electric. SoS would have to use a different type of system for those who live and drive in the country using county, township and village roads. Maybe a small monthly fee for using those roads. Could the villages and townships do a quarterly or semi-annual mileage check?

Comment by M Friday, Jun 11, 21 @ 1:03 pm
- The big question to me remains- how are they going to charge all those cars? -

Right? I mean we lucked out with gasoline because all of those gas stations around the country just sprung up from the ground on their own, I don’t think we’re going to be so lucky this time.

Comment by Excitable Boy Friday, Jun 11, 21 @ 1:08 pm
Excitable Boy, gas station owners will start supplying electric charging stations for all electric vehicles to stay in business. A state tax can be charged at the charging stations - the same as gas.

In addition to that, the state could build its own charging stations at the weighing stations on the Interstates for semi-trucks, pick-up trucks,SUVs, Vans, Cars and Motorcycles for emergency charges.

Comment by M Friday, Jun 11, 21 @ 1:38 pm
M, I was responding to Bob Adams in a snarky manner.

Comment by Excitable Boy Friday, Jun 11, 21 @ 2:09 pm
==What are the implications of this energy policy for road maintenance? ==
While they are at it, they should start making giant truck-cranes buy truck license plates. They tear up the roads and not requiring a license plate.

Comment by DuPage Friday, Jun 11, 21 @ 2:37 pm
Imagine a future where most cars are electric. I think a way will be found to fund road building and repair. Worry about your covid shot instead.

Comment by Jibba Friday, Jun 11, 21 @ 2:42 pm
==New license’s plates should have a computer chip coded as to whether the vehicle is gas or electric.==

Not necessary - license plate readers will do the trick nicely, thanks. Especially since the current license plates for EVs actually end in the letters EL (should be a cinch for plate scanners to identify). The Teslerati are real indignant about it: https://forums.tesla.com/discussion/171066/illinois-plates

As was already mentioned here and in that link, EV owners are already paying extra for license plates to make up for the fact that they don’t pay gas tax.

Comment by Anonymous Friday, Jun 11, 21 @ 2:43 pm
It’s sad that CWLP and the Prairie State owners are now just talking about piloting carbon capture and storage/reuse systems. It’s 2021 and the window for avoiding the worst impacts of climate change is quickly closing. Dallman #4 and Prairie State should have been equipped with CCS systems when they were built. Time to pay the piper and start a serious transition to a low carbon future. Tackling climate change may be costly, but not tackling it will cost even more.

Comment by Going nuclear Friday, Jun 11, 21 @ 2:47 pm
And what exactly are Illinois homeowners supposed to do about replacing millions of gas furnaces by 2045? How do you replace the huge power demands of any industry that relies on natural gas for heat and power. A windmill? How does John Deere transition to producing electric combines? What a joke.

Comment by wizatlanta Monday, Jun 14, 21 @ 8:18 am
===replacing millions of gas furnaces by 2045===

That’s 24 years from now.

Comment by Rich Miller Monday, Jun 14, 21 @ 8:58 am
..And if you’re interested go to the U.S Dept. of Energy website by Googling: What is capacity factor (?) to see about the consistency of energy generation by wind and solar. It seems unlikely that those two sources can “go it alone” in the time allotted. The ability of those sources to provide reliable “baseload” electricity should be a concern.

Comment by Guyzer Monday, Jun 14, 21 @ 5:43 pm
I see no reliability guarantees to keep the lights and heat on during intermittent solar and wind events.
We can’t afford the blackouts and brownouts like CA and TX experienced last winter and are now seeing this summer.
Without reliability guarantees, this is a disaster for Illinois citizens.

Comment by Anonymous Thursday, Jun 24, 21 @ 5:37 pm