Bill would boost Illinois renewables, keep nuclear, squeeze coal

Source: Jeffrey Tomich, E&E News reporter • Posted: Monday, March 4, 2019

A sprawling energy and jobs bill introduced in Illinois yesterday envisions a steep ramp-up for wind and solar energy — one that supporters say would produce a variety of social, economic and environmental benefits.

The 365-page “Clean Energy Jobs Act” would double the state’s renewable energy standard to 50 percent by 2030, enabling 8,000 megawatts of new wind energy over the next decade and 16,000 MW of solar.

The bill also would set a 100 percent renewable energy goal by 2050, would direct the Illinois EPA to establish rules to regulate carbon emissions and aims to slash tailpipe emissions by incentivizing electric vehicle adoption (Greenwire, Feb. 28).

Illinois is among a growing list of states aiming to transition more quickly under Democratic governors toward 100 percent renewable energy. But the state is unique in that 85 percent of its electricity generation today comes from nuclear energy and coal — energy sources that would fare very differently under a separate provision of the bill that would require the state’s power sector to be carbon-free in a decade.

Like the “Green New Deal” being debated at the federal level, Senate Bill 2132 and its House companion (H.B. 3624) are prompting questions about the future of coal, how the renewable expansion will be funded and what it means for Exelon Corp.’s eight nuclear plants in the state, three of which the company said are at risk of early closure.

At least some of the answers hinge on another part of the bill linked to a cantankerous and complex debate over the capacity market run by grid operator PJM Interconnection, which manages the bulk power grid across 13 states and Washington, D.C.

The bill, announced in news conferences yesterday in Chicago and Springfield, would direct the Illinois Power Agency to take over the procurement of power plant capacity for Commonwealth Edison’s service territory in northern Illinois — a process currently done through PJM’s annual capacity auction.

“The PJM capacity market is sort of an existential crisis for consumers and the environment,” said David Kolata, executive director of the Citizens Utility Board, a Chicago-based consumer group.

Focus on choice

Kolata said the capacity market’s “crisis” stems from consumers being forced to pay for power plant capacity that they neither want nor need, and the market reforms by PJM would only further inhibit the state’s ability to transition to clean energy.

By self-procuring capacity, he said, Illinois could “repurpose” hundreds of millions of dollars in annual savings to wind and solar investment and save consumers money.

The state already can choose to self-procure capacity under the Fixed Resource Requirement Alternative in PJM’s existing tariff and ought to do so, Kolata said.

Stu Bresler, senior vice president of markets and operations for PJM, agreed that Illinois can choose to self-supply capacity.

But he disagreed with the claim that Illinois consumers are overpaying for capacity under the grid operator’s existing market rules or reforms proposed to the Federal Energy Regulatory Commission.

“The PJM capacity market has resulted in robust reliability at least cost,” he said.

Northern Illinois has seen higher capacity prices than other zones within PJM in recent auctions because of a limit on how much capacity can be imported from other areas, Bresler said.

Those constraints don’t go away if Illinois procures energy from within the state. “The physical nature of the system doesn’t change,” he said.

The biggest power plant owner in northern Illinois — Exelon — has been a part of legislative negotiations but has yet to take a formal position on the bill.

David Fein, a senior vice president of state governmental and regulatory affairs for the Chicago-based company, said in a statement that the bill is a “positive step forward.”

Fein said Exelon agrees “that there is an urgent need for the state to take control of the capacity procurement of zero-carbon energy resources as the best way to help achieve the state’s clean energy goals while benefiting our state’s economy and jobs and keeping energy prices affordable.”

While the bill doesn’t further subsidize Exelon’s nuclear fleet, a requirement to get half the state’s power from renewables and decarbonize the state’s power sector by 2030 implies the company’s reactors will continue to operate.

Coal, climate

The bill’s ambitious goals spell a completely different fate for the state’s coal-fired power plants.

“Everybody seems to be falling all over themselves to be the first to 100 percent renewables,” said Phil Gonet, executive director of the Illinois Coal Association. “It certainly hurts coal, and the people in coal country are not going to be in favor of that.”

Gonet argues that the state, in particular its southern half where most of the coal-fired power plants are, can’t achieve 50 percent renewable energy by 2030 or eliminate carbon emissions without sacrificing reliability.

Jen Walling, executive director of the Illinois Environmental Council, said market forces are already leading to shutdowns of aging coal plants, including in Illinois. That is why provisions in the bill aim to support workers and communities impacted by plant closures.

“We need to support those workers far in advance,” she said. “We need to support those communities far in advance. And that is what this bill does.”

Of the bill’s three dozen co-sponsors, almost all of them so far are Chicago-area Democrats. Only one is a Republican, and none represent districts in the southern part of the state with coal mines or coal-fired power plants.

Rep. Ann Williams (D) of Chicago is the bill’s lead sponsor in the House, where she leads the Energy and Environment Committee.

Williams said she believes support for the bill among legislators from downstate will grow as they realize the economic and social benefits, including workforce development “hubs,” job training and tax incentives.

“There’s a lot of things in this bill that go beyond clean energy,” Williams said in an interview with E&E News.

The bill’s broad goals and social equity provisions have already drawn comparisons to the “Green New Deal.”

The measure is likewise as ambitious in its goal of eliminating carbon emissions by 2030.

“The comparison I see is that many people, I hope most people, are concerned about the impact of climate change,” Williams said. While there are efforts going on in Washington, “we need to see what we can do at the state level.”

Williams is one of several bill sponsors who served on the governor’s energy transition team.

She said the bill’s four “pillars” grew from a series of 60 community meetings across the state organized by the Illinois Clean Jobs Coalition, a group of environmental advocates, businesses, and labor and faith groups that organized in 2015 to push legislation that ultimately became the 2016 Future Energy Jobs Act (FEJA).

The bill aims to build on FEJA by continuing the state’s clean energy transition, and it broadly aligns with Gov. J.B. Pritzker’s (D) goal to slash carbon emissions and put the state on a pathway to 100 percent renewable energy by midcentury.

In a statement, Pritzker spokeswoman Jordan Abudayyeh said the governor applauds the work of the Clean Jobs Coalition and looks forward to reviewing the bill.

“The governor is deeply committed to safeguarding our environment for future generations, and he believes strongly in the science of global warming,” she said, noting that he committed Illinois to the U.S. Climate Alliance within his first weeks in office. “He also wants to ensure that Illinois has a real plan to invest in the communities that would be impacted as the state shifts toward clean energy sources.”

Numerous provisions in the bill announced yesterday are aimed at boosting low-income and minority neighborhoods as well as coal plant and mine workers and communities that have been hit hardest by fossil fuel pollution.

“We need the benefits of clean energy to reach all 102 counties in Illinois, rural and urban,” Williams said. “The bill is ambitious, but it’s achievable.”