In wake of N.Y. subsidies plan, debate shifts back to Illinois

By Jeffrey Tomich | 08/03/2016 07:34 AM EDT

Monday’s vote by New York utility regulators approving nearly half a billion dollars in annual subsidies over the next two years for a trio of ailing nuclear plants was a victory for Exelon Corp., which owns two of the plants and is in talks with Entergy Corp. to buy the third.

Now the polarizing debate moves back to Chicago-based Exelon’s home state, where the clock continues to tick on a similar measure to aid a pair of nuclear plants ticketed for closure each of the next two years.

Exelon announced plans to shut the Clinton and Quad Cities nuclear plants in mid-2017 and -2018, respectively, at the expiration of their commitments to run. The company has said the plants — and jobs and taxes they provide — can still be spared. But doing so requires assurances that they won’t continue to sustain millions of dollars in annual losses.


Just as in New York, where the nuclear subsidies are tethered to the future of the state’s renewable energy industry, the same is true in Illinois. There, legislators are trying to reconcile a suite of competing proposals to come up with a comprehensive energy bill that aims to achieve environmental and economic goals.

In addition to the sweeping 306-page bill offered by Exelon and utility affiliate Commonwealth Edison Co. in the final weeks of the regular session, a group of renewable energy advocates have lobbied hard for a measure that would significantly expand renewable energy and energy efficiency in Illinois.

The advocates are part of the Illinois Clean Jobs Coalition, which yesterday renewed a push for the Illinois General Assembly and Gov. Bruce Rauner (R) to approve the "Illinois Clean Jobs Bill," H.B. 2607/S.B. 1485, to catalyze wind and solar development and increased energy efficiency.

Coalition members held a conference call yesterday to emphasize the economic benefits of additional clean energy development. The call was a preface to today’s U.S. EPA hearing in Chicago on the Clean Energy Incentive Plan (CEIP), a voluntary program that’s part of the Clean Power Plan. The CEIP is meant to help stimulate renewable energy development and energy efficiency, especially in low-income areas.

The energy debate has been dormant in Illinois, at least publicly, since the General Assembly adjourned on May 31 without taking action. Two days later, Exelon announced plans to close the two nuclear plants.

Coalition members said talks with Exelon and other parties have continued since and that progress is being made. And with a long-running budget impasse having been temporarily resolved, they said now is the time to finalize a compromise bill.

In a conference call with reporters, the group stressed that the focus of any energy bill must be expanding wind, solar and energy efficiency. But political reality likely also means the measure will include some sort of aid for nuclear plants.

"We have very serious environmental concerns with nuclear power," said Jen Walling, executive director of the Illinois Environmental Council. But "we’re realistic about decisions for Illinois going forward, and that looks like something that will be part of a package," she said.

Kevin Borgia, manager of public policy for Wind on the Wires, a wind advocacy group that’s also part of the Illinois Clean Jobs Coalition, agreed.

"I don’t know that that changes the dynamic, especially in Illinois, but I think it underscores a reality that nuclear and renewables are not at odds with each other," Borgia said. "It’s not a zero-sum game. Nukes and renewables can co-exist."

Will nukes and renewables co-exist?

State Sen. Don Harmon, a Democrat from the Chicago suburb of Oak Park, Ill., and lead sponsor of the "Illinois Clean Jobs Bill," agreed that whatever energy legislation emerges would include expansions of renewables and energy efficiency, as well as language to address financial challenges faced by Exelon’s unprofitable nuclear plants.

Critical details still have to be agreed to, however, and whether that can be done in time to save the Clinton nuclear plant in central Illinois, which is scheduled to shut down on June 1, 2017, remains to be seen.

"I don’t know that anything would happen until late this year or early next year," Harmon said in an interview.

Exelon has indicated that it faces a late-September decision to purchase fuel for the 1,068-megawatt Clinton plant. The company is seeking a mechanism similar to the one approved in New York, though the maximum amount of annual payments required to keep the Illinois plants running would initially be far less.

The company, however, has been careful not to give a drop-dead date for making a decision to pull the plug. And more than once in the past, Exelon CEO Christopher Crane has stepped back from deadlines in an effort to keep reactors running.

Exelon officials weren’t available yesterday to discuss the status of the energy debate in Illinois. But the company issued a statement: "The decision can serve as a model for Illinois policymakers as they consider the Next Generation Energy Plan, which will drive investment in zero-carbon energy and establish a Zero Emissions Standard that was patterned after the CES [clean energy standard] in New York."

While there are similarities between New York and Illinois, including the owner of the effected nuclear plants and the zero-emission credit mechanism proposed to keep them profitable, there are also important differences.

Among them, the decisionmakers. In New York, Democratic Gov. Andrew Cuomo’s CES was approved by the four-member Public Service Commission, three of whom were appointed by the two-term Democratic governor.

In Illinois, by contrast, an energy bill will require legislative approval. And while the debate has so far centered on the tension between the renewable energy industry and Exelon, other political interests have made their voices heard.

The coal industry, which employs more than 3,000 people in downstate Illinois, faces its own threats because of pressure from natural gas and stricter environmental regulations. The Illinois Coal Association has opposed the Exelon bill.

The same for big industrial energy consumers and Illinois Attorney General Lisa Madigan, who continued to refer to the Exelon legislation as a "bailout."

A spokeswoman for Madigan confirmed in an email that her position hasn’t changed.

David Kolata, executive director of the Chicago-based Citizens Utility Board, a watchdog group and Clean Jobs Coalition member, said Illinois should remain focused on finding the least-cost solution to meet its energy needs while cutting carbon emissions and creating jobs.

"Is it least cost to keep [the nuclear plants] around or is it cheaper to replace them?" he said.

Kolata said the Illinois Commerce Commission could play a key role in that question by conducting a formal proceeding with testimony and cross-examination.

"I think there’s been substantial progress to try to find a pathway that would meet the goals of the Clean Jobs Coalition," he said. "We’ll have to wait and see how that pans out."