By STEVE DANIELS
Exelon CEO Chris Crane has paid personal visits in recent weeks to House Speaker Michael Madigan and Senate President John Cullerton to warn them the power-industry giant will begin the process of shuttering its downstate Clinton nuclear plant if it doesn't get financial help from the state this spring. Exelon also has informed Gov. Bruce Rauner, as well as Republican leaders in both chambers, according to people familiar with the discussions.
It's far from clear, though, that Springfield will respond to the renewed threats from Illinois' largest power generator. Exelon, owner of Commonwealth Edison, owns six nuclear stations in Illinois, generating as much as 11,841 megawatts and employing about 2,700. That's enough juice to power well over 10 million homes.
Exelon last year warned it would have to close as many as three of its six nukes without passage of a bill that would have imposed a surcharge on electric bills statewide to provide as much as $300 million in additional revenue to the company's fleet. The bill never saw floor action in either chamber as the budget war between GOP Gov. Rauner and Democrats who run the Legislature raged.
Exelon late last year then appeared to back off its threats and agreed to keep its plants open for the near term. Now the threats are back. The company is expected within a month to float a revised version of last year's bill that likely won't be quite as generous.
Still, the reception Crane got was tepid.
Cullerton told him a bill could see action if it could strike a compromise with other parties wanting comprehensive energy legislation—green groups, consumer advocates, coal interests, renewable power producers.
“There is a real concern about the potential loss of jobs,” a Cullerton spokesman said in an email. “Exelon was urged to work together with the various interests and parties to try to come up with a solution everyone involved could support.”
Madigan spokesman Steve Brown declined to comment on whether the speaker met with Crane. A Rauner spokesman didn't respond to a request for comment.
An Exelon spokesman would only say in an email, “We continue to discuss with state leaders and other stakeholders the challenges facing some of our plants and the need for comprehensive energy policy reforms that preserve the enormous economic, environmental and other benefits the state will lose if these plants were to be shut down.”
Exelon faces several challenges, however.
The first and most important is the issue that played the greatest role in derailing Exelon's plea for financial help last year. Rauner and the Democrats are still at war, and if anything the conflict has gotten more toxic than it was nine months ago.
The idea that lawmakers would agree to support a forced electricity rate hike to help a profitable Fortune 500 company while social service providers are laying off workers for lack of a budget is implausible.
The second is that the wide array of interests participating in energy policy deliberations have been negotiating for months. By all accounts, the discussions have been cordial, but a deal isn't yet in sight.
Exelon continues to object to proposed changes to the state's clean power law that would open the door to new wind farms in Illinois. And environmental groups continue to oppose a “bailout” for Exelon's nukes so long as new renewable power facilities are so difficult to develop here.
Competitors that own coal-fired power plants here—Houston-based Dynegy and Princeton, N.J.-based NRG Energy—also are adamantly opposed to legislation that would aid Exelon's nukes. Those coal plants are suffering financially for the same reasons Exelon's nukes are—wholesale power prices are unusually and persistently low, making it hard for less efficient plants to operate at a profit.
If leaders continue to insist that they'll act only if all interested parties are in support, that could lead to unreasonable demands from any participant in the talks. Insistence on agreement from all gives people in the discussions potentially great leverage to win concessions they otherwise might not be able to get.
A third impediment is that Commonwealth Edison also is an important part of the energy stew. The Exelon-owned utility has its own bill in Springfield, which would establish a new rate design aimed at bolstering ComEd's revenues in an era when electricity consumption is flat. That measure also would endorse a series of new ComEd-built-and-owned “microgrids”—mini power grids to provide greater reliability to sensitive installations in the region—that boost ComEd earnings.
ComEd has led the discussions in recent months with solar and wind power developers, environmental groups and consumer advocates.
“Those conversations have been productive and have focused on common interests among the various groups toward an integrated low-carbon energy future that fairly serves all customers, encourages economic growth and creates jobs,” a ComEd spokesman says in an email.
One of the participants in those discussions agreed the talks have resulted in some progress but said they're not on the verge of producing a grand compromise.
“There are genuine and deep differences among the very diverse set of parties on what is an acceptable result in a competitive market,” said Howard Learner, executive director of the Environmental Law and Policy Center in Chicago, an advocate for renewable power. “We are open to a deal. But that doesn't mean the parties are close to reaching an agreement.”
Absent a broader budget deal, the energy issues seem likely to linger into the fall after Exelon has begun the formal process of closing the Clinton plant, which employs about 700.
Clinton is losing tens of millions annually right now, Exelon has said. Crane told Wall Street analysts last month that both Clinton and Exelon's Quad Cities nuke on the Mississippi River are in the red. Exelon, however, is committed to keeping Quad Cities open at least until mid-2018.
Wall Street isn't counting on Illinois to act this year.
“With the Legislature seemingly stalled in 2016 without a budget deal . . . we look towards 2017 for any resolution of the roadblock,” UBS Securities analyst Julien Dumoulin-Smith wrote in a March 4 report. “The question remains whether the 'sacrifice' of Clinton will catalyze a wider effort to push forward on any deal to save the balance of the portfolio with a 'market-based' carbon scheme in the state.”