By: Kim Geiger
Exelon is back at the Capitol trying to win financial help for two struggling nuclear power plants, pushing what opponents have called a "Christmas tree" of giveaways that they estimate could cost consumers as much as $24 billion over 23 years.
Like the energy giant's past attempts, the latest effort is propelled by a threat that the company will close its nuclear power plants in downstate Clinton and the Quad Cities if lawmakers don't act. Unlike the failed efforts of the past, the new bill includes a subsidy for downstate plants that burn coal from Wyoming.
The massive legislation touches almost every realm of energy policy in Illinois. It would allow utility companies ComEd — an Exelon subsidiary — and Ameren to use a new system for charging customers that would be based on an average of peak usage instead of overall electricity use. It would give a customer-funded boost to energy efficiency efforts while allowing utility companies to reap management fees and interest payments on those programs. It would adjust standards for the state's renewable energy goals, but some solar companies say it would give the advantage in that arena to the utility companies.
The bill is so complicated that it sets aside $21 million for education programs to help ratepayers navigate the new systems — paid for, again, by consumers.
It's the third time in two years many of these proposals have come before lawmakers. Each time, more provisions are added in an attempt to lure enough lawmakers on board, the latest being the addition of subsidies for the downstate coal plants. The situation is partly the making of legislative leaders, who last year directed Exelon, ComEd and a coalition of clean energy advocates to get together and hammer out a single bill that would address the needs and desires of everyone involved.
The result is a 446-page bill that was unveiled last week and was the subject of a marathon hearing in Springfield. Exelon says it wants a vote on the legislation when lawmakers return to Springfield after the Thanksgiving holiday. But its coalition has fragmented since the provision for coal plants was added to the bill — environmental advocacy groups dropped their support — and a large number of opponents remain.
Exelon concedes that the bill might need to be changed before it can win approval. Even then, the oxygen at the Capitol has been consumed by two years of fighting over a still-elusive budget.
The company has tried to ratchet up pressure for the legislation, taking formal steps over the summer to start the process of closing its Quad Cities plant and promising a similar move on its Clinton plant in early December. The two plants account for 1,500 jobs that some lawmakers would rather not see disappear.
Working in the power companies' favor is their status as top donors to lawmakers. Exelon and ComEd gave more than $1.2 million to state campaigns since the beginning of 2015, records show. Dynegy, the Houston-based company that owns the subsidy-seeking coal plants, gave more than $308,000.
Neither Republican Gov. Bruce Rauner nor Democratic House Speaker Michael Madiganhave weighed in publicly on the energy bill.
"It's a complicated issue, and I think people are trying to resolve it," Madigan spokesman Steve Brown said.
Reflecting the broader political battle in Springfield where the Democratic majority has resisted taking unpopular votes without having Republicans on board to share the blame, Brown said lawmakers were looking for guidance from the governor.
"Absent some statement of support, I don't know that the bill goes anywhere," Brown said. "If there's not going to be a sign, who's gonna walk the plank?"
Indeed, there is outrage brewing in Springfield.
"The thought that anyone in the General Assembly would consider moving this bill in any way, shape or form as it stands … on the backs of families, businesses, communities, churches, is unbelievable," Julie Vahling, of AARP Illinois, warned at a Capitol news conference held by opponents.
Opponents say the bill would cost Illinois ratepayers an additional $24 billion between 2017 and 2040. The Building Owners and Managers Association of Chicago, which represents 234 commercial office, institutional and public buildings in downtown Chicago, expects the bill to cost its members and their tenants $417 million. With property taxes and utility costs ranking as the two biggest expenses for office buildings, the organization predicts that a rate hike of that size could drive companies and jobs out of the state.
Exelon did not provide its own estimates, saying it was impossible to know how future energy prices could affect the cost of the legislation down the road. ComEd has estimated that the entire bill would cost consumers an extra 25 cents a month, or $150 million over time. The company argues that higher cost estimates don't give enough credit to savings that customers would reap from investments allowed for in the legislation.
The most costly provisions, according to the Building Owners and Managers Association of Chicago analysis, are the subsidies for the coal and nuclear plants, as well as a change to the way energy efficiency programs are handled.
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."
ComEd counters that the change would save consumers in the short-run because they don't have to pay for the entire cost of the program upfront.
"If we have an energy efficiency program that delivers energy efficiency benefits for 10 years, instead of paying the full amount in year one, you pay 1/10th in year one," said Fidel Marquez, a senior vice president at ComEd. "What that does is automatically reduce the amount our customers are paying ... upfront."
Also contentious is a ComEd-led effort to change the way customers are billed for their energy usage. Instead of charging customers for the energy they've used over the course of a month, the company wants to start billing based on an average of a customer's top 30 minutes of usage on weekdays.
ComEd argues this more fairly spreads the burden of paying for its energy delivery system. The company contends that people who use solar power don't have to pay their fair share under the current system, and the new billing system would correct that problem before solar energy becomes more prevalent.
Without the change, Marquez said, "our low-income customers are going to bear the burden ... because those who can't afford solar are going to subsidize those who can."
Solar companies see it differently. They argue the new billing system would make it impossible for them to persuade people to invest in solar because it would obscure costs — and potential savings — on their energy bills.
Amy Heart, director of public policy at solar panel company Sunrun, said the new billing system is an attempt by the utility companies to monopolize the emerging solar market.
"They only want solar in Illinois if they can own it, control it and charge you for it," Heart said.
The attorney general's office also raised concerns about the idea, saying it would be unprecedented for a state legislature to allow such a practice to be imposed on residential customers.
"My understanding is that it has been rejected by all (regulatory agencies) who have considered it," Hendrickson said. "I do not know whether any other legislative body in the United States has considered it. ... What I do know is that no other legislative body has passed it."
Perhaps the most controversial element of the bill is the last-minute addition of subsidies for downstate coal plants. Joe Dominguez, executive vice president at Exelon, said that piece of the bill was "in jeopardy" because of the fierce opposition.
"The next week is going to be about seeing whether we could resolve differences of view on those more controversial elements of the bill and bring more proponents onto the bill," Dominguez said.