Illinois RPS Update: Energy Bill Awaits National Signals

Source: By Kevin Borgia, North American Wind Power • Posted: Friday, July 10, 2015

The long-fought effort to fix Illinois’ broken renewable portfolio standard (RPS) is in a holding pattern for the summer as lawmakers and other stakeholders await two key national energy developments that are expected to shape the state’s energy debate.A battle raged in the Illinois General Assembly this spring about the state’s energy future, and stakeholders expected to see an omnibus energy bill emerge toward the end of the session. But despite several hearings, lawmakers didn’t act on any of the energy bills pending in both chambers.

Reportedly, legislative leadership and Gov. Bruce Rauner, R-Ill., were hesitant to take action on energy legislation until the release the Enivironmental Protection Agency’s final Clean Power Plan (CPP) rule, expected for some time this August. The details of that rule will impact the policy debate in Illinois.

Additionally, a capacity auction for plants in the PJM Interconnect is slated for later this summer. The results of that auction will partially determine how much financial assistance Exelon needs for its struggling nuclear plants. With so much uncertainty from these two key developments, lawmakers chose to put energy on the back burner.

It’s not surprising energy fell by the wayside. For months, Democratic supermajorities in the House and Senate have clashed with Rauner over budgets and other hot-button items on his agenda, including taxes, tort reform, term limits, redistricting and other matters. Though the legislative session officially ended on May 31, lawmakers have continued holding session days to debate and vote on these major policies.

No significant discussion on energy is expected until after the CPP rule and PJM auction at least, with the earliest likely legislative action expected during the November veto session.

The stakes are high for the clean energy sector. The Illinois Clean Jobs Bill would fix the RPS law, which is riddled with technical flaws that hinder its implementation. The bill would expand its goals from 25% by 2025 to 35% by 2030.

Analysts have estimated that fixing and expanding the law could yield upward of 6,000 MW of new wind demand and several thousand megawatts of solar, as well. The bill also expands energy-efficiency opportunities. Advocates project the bill could create over 32,000 jobs in construction, manufacturing, operations and energy-efficiency retrofits.

The bill has support from the Illinois Clean Jobs Coalition, a wide-ranging group of clean energy companies and environmentalists, as well as labor, faith, ratepayer and other groups. The coalition launched in early February with support from Chicago Mayor Rahm Emanuel, and its bill has 58 co-sponsors in the House, just two short of a majority.

The stakes could be even higher for nuclear giant Exelon. Its nuclear plants have been hit hard by competition from low natural gas prices, and the company has said several of its Illinois plants are unprofitable under current market conditions. The company backed another bill this session that would make the plants financially solvent again.

The company’s “low-carbon portfolio standard” bill would theoretically allow renewables to compete, but it was written to virtually ensure only Exelon-owned nuclear plants would qualify.

Consumer advocates quickly panned the proposal. ‘Heads up, Exelon wins. Tails up, Exelon wins.’ That’s not a free market. It’s a bailout,” says Cara Hendrickson of the Office of Illinois Attorney General.

After the assembly failed to act on either energy bill, Exelon sent a letter to House Speaker Mike Madigan including a thinly veiled threat to close its Clinton nuclear plant if lawmakers don’t act by the end of the year.

“Policy reforms ultimately may come too late to preserve some plants,” says Exelon executive vice president Joe Dominguez.

The coming months will be interesting for Illinois, and the ongoing conflict between the governor and Democratic leadership continues to overshadow all policy discussions. Hopefully, the CPP rule release and PJM auction results will motivate lawmakers to act soon and put the state on the path to clean energy growth and the job creation that comes with it.

Author’s note: Kevin Borgia is public policy manager at Wind on the Wires, a regional partner of the American Wind Energy Association. He can be reached at kborgia©