The bill expands renewable energy development while keeping Exelon’s struggling nuclear plants in operation.
The Illinois General Assembly passed a major energy bill on Thursday that will allow Exelon’s Clinton and Quad Cities nuclear power plants to remain in operation as part of a broader package of measures to support clean energy in the state.
The Future Energy Jobs Bill (SB 2814) will direct $235 million in annual ratepayer subsidies to the uneconomic nuclear plants that collectively employ 1,500 full-time workers. Had the bill failed, Exelon planned to close the Clinton Power Station on June 1, 2017, and shutter the Quad Cities Generating Station a year later. The two facilities have lost a combined $800 million in the past seven years.
“This has always been first and foremost about doing the right thing for our customers, the talented men and women who operate the plants, and the communities we serve,” said Chris Crane, president and CEO of Exelon, after the bill was approved.
Exelon and Illinois subsidiary Commonwealth Edison claim the bill maintains $1.2 billion in economic activity generated by the nuclear plants and prevents an estimated $10 billion in increased costs associated with higher carbon emissions had the plants closed.
The World Nuclear Association celebrated the passage of the Illinois bill, but highlighted the need for market-based solutions to drive the nuclear industry in future.
"In the longer term, we need markets to deliver the electricity mix that we need, without intervention,” said Agneta Rising, director general of the World Nuclear Association. “Markets should recognize the value of secure and reliable electricity supplies, as well as the environmental benefits of different forms of electricity generation.”
U.S. environmental and consumer advocates negotiated several other significant changes to Illinois’ energy policy as part of deal, including updates to the state’s renewable portfolio standard, an expansion of efficiency programs, and the preservation of net metering for rooftop solar projects -- a policy ComEd sought to end. The final bill also scrapped a controversial proposal to implement mandatory demand charges on all residential customers. Solar companies strongly opposed the proposal, and Governor Bruce Rauner’s office called the demand charges “insane.”
“For months, the potential for demand charges hung over the state like a dark cloud,” said Rebecca Stanfield, vice president of policy and electricity markets for SolarCity. “Demand charges fundamentally change the way consumers are billed for energy; instead of being charged for total usage, customers would be billed based on the intensity of consumption over a short period of time.”
“The Illinois solar industry will immediately get to work to ensure all the intentions of this massive bill are technically defined and implemented to create a vibrant solar industry,” she said.
Exelon is one of several investor-owned utilities to pursue rate changes that would reduce the economic appeal of distributed solar. The NC Clean Energy Technology Center’s latest policy tracking report found a total of 117 state and utility-level distributed solar policy and rate changes were proposed, pending or enacted across the U.S. in Q3 2016.
However, attempts to pass mandatory demand charges on all residential or solar-only customers have largely failed to date. While some smaller utilities have approved the charges, all recent proposals by investor-owned utilities across 14 states have not succeeded. The Alliance for Solar Choice (TASC) is hopeful that other states will follow Illinois' lead.
“Demand charges were recently proposed in Utah, and we are hopeful that the Utah Public Service Commission will similarly reject these unprecedented and confusing charges in order to protect solar jobs and consumer choice,” said Lauren Randall, senior manager of public policy for Sunrun, a leading supporter of TASC.
"Collaboration among a diverse group of stakeholders, all calling for more access to solar, was key for victory in Illinois,” she said. “We are already witnessing a similar groundswell in Utah, with people calling for a fair, transparent process to evaluate the myriad benefits of solar, including more local jobs, less pollution, and more energy choice."
While the Illinois bill is a win for solar overall, there is some more work ahead. The Future Energy Jobs Bill allows retail-rate net metering for solar customers to continue up to 5 percent of ComEd’s peak demand. At that point, the bill directs state regulators to launch a stakeholder process to evaluate the costs and benefits of rooftop solar to inform future policy.
In the meantime, the outlook is bright for renewables in the Prairie State, particularly in light of reforms to the state’s RPS passed this week. The bill retains the current 25 percent renewable energy target, but fixes quirks in the RPS that caused funds for renewable energy projects to go unused and allowed Illinois to meet the RPS criteria by investing in clean energy projects out of state -- missing out on the opportunity to create local jobs and economic growth. Provisions were also included to ensure a mix of utility-scale wind and solar, community solar and rooftop solar will be used to meet the 25 percent target.
Changes to the RPS and expansion of the state’s efficiency programs were made after nearly two years of negotiations and grassroots organizing, with efforts led by the Environmental Law & Policy Center, Citizens Utility Board, Natural Resources Defense Council, Sierra Club, Environmental Defense Fund and others. In light of the election of Donald Trump, who has opposed federal action on climate and clean energy, Jack Darin, director of the Illinois Chapter of the Sierra Club, highlighted the need for strong state action going forward.
“Clean energy technology is growing every year in Illinois. These policies will nurture that shift away from fossil fuels, bolster our energy economy and help ensure that every Illinois community can thrive in the clean energy economy,” he said. “With federal climate action being more uncertain than ever, it is more important than ever that states act decisively on climate change, and Illinois is doing just that.”
Not all stakeholders were pleased with the Illinois outcome, however. Dave Lundy, director of the BEST Coalition, a non-profit representing businesses and consumer groups, called the rate caps in the bill "a sham, sold as consumer protections but gamed by Exelon to ensure maximum profits for the company."
According to ComEd, the bill costs for the average residential customer are capped at an additional 25 cents per month. But according to the BEST Coalition, citing an analysis by The Power Bureau, the bill will actually cost residential ComEd customers an additional $4.54 per month, and cost Ameren customers an additional $2.01 per month. "Governor Rauner still has a chance to stand up for business and consumer ratepayers and veto this massive rate hike for everyone," Lundy said.
Rauner aided in the negotiation of the Future Energy Jobs Bill and is expected to sign the legislation once it reaches his desk. The bill will take effect on June 1, 2017.