SPRINGFIELD – With federal regulatory changes looming and legislators one week away from a return to the Capitol, some clean energy advocates are looking to jumpstart a stalled proposal to bring major reforms to the state’s energy landscape.
Members of the Illinois Clean Jobs Coalition, including the legislative sponsors of the Clean Energy Jobs Act spoke Tuesday at the James R. Thompson Center in Chicago. They said the issue is urgent because of the ongoing effects of climate change and a recent ruling by the Federal Energy Regulatory Commission.
“The Clean Energy Jobs Act will make the state a national leader in securing clean, affordable energy for all consumers in the state,” said state Sen. Cristina Castro, CEJA’s Senate sponsor. “Climate change is an emergency we can’t ignore, and the Trump administration is doing everything it can to bail out fossil fuel power plants and force Illinois to take a giant step backwards from achieving 100% renewable energy.”
Illinois is part of the federally regulated PJM grid, which purchases capacity from electricity generators on behalf of all or portions of 13 states and Washington, D.C., at an auction every year.
Capacity procurement is not the purchase of actual energy, but the guarantee that the generator will be able to supply a certain amount of energy at any time – especially during the grid’s highest usage times – over a specified period of time. Customers pay for these capacity costs through the supply charge on their electric bills.
On Dec. 19, FERC voted, 2-1, to change the PJM rules regarding the minimum offer price a generator can bid, noting in a news release the action was taken to “address the impact of state subsidies on the wholesale capacity market.”
In a news release, FERC said it levels the playing field for all energy generators, but advocates claim it will “force Illinois consumers to pay extra for electricity generated by coal and other dirty sources of power that aren’t needed to serve local demand.”
The Clean Energy Jobs Coalition also said the ruling “directly undermines” Illinois’ 2016 passage of the Future Energy Jobs Act, which created renewable energy credits and zero emissions credits for wind, solar and nuclear power generators.
The 126-page ruling gave PJM 90 days to comply and to set its next capacity auction date, but it also gives states the opportunity to remove themselves from the PJM capacity auctions and choose their own ways to procure energy capacity.
CEJA would make those changes by putting capacity procurement authority in the hands of the state-run Illinois Power Agency. The bill also includes a “consumer protection adjustment,” which would lock in a 5% reduction on northern Illinois electric bills for the next five years, said Dave Kolata, executive director of the Citizens Utility Board.
“The FERC ruling was structured specifically to penalize states such as Illinois that have made cost-saving investments in energy efficiency and renewable sources of power,” Kolata said. “… CUB supports CEJA because it’s the only energy bill in Springfield that offers a blueprint for protecting our pocketbooks while helping Illinois achieve 100% clean energy to protect our planet.”
Kolata noted Tuesday that the next capacity auction is likely to take place by December, so he said it’s imperative to pass CEJA by the end of this legislative session, which will run from January through May.
While the advocates quoted a Grid Strategies report which said the FERC ruling could mean an increase of up to $864 million annually for northern Illinois ratepayers – or about $70 annually per ratepayer – an independent market monitor of PJM said that report drew “broad and incorrect conclusions” from data provided by the monitor.
Another group of green energy advocates is the Path to 100 Coalition which is backing another measure aimed at driving the state toward 100 percent renewable energy without major immediate changes to capacity markets.
In a statement, Path to 100 spokesman Peter Gray cautioned against a “rush to enact” capacity market changes.
“While FERC’s order may have an impact on renewable energy and for consumers, we need to make sure that Illinois’ doesn’t rush to enact policies that could make the situation worse,” he said.
“In the coming months, FERC will vote to reconsider or clarify parts of its order and then PJM will respond to the order. At that time, the state can begin the process of carefully considering proposals that would fundamentally reshape Illinois’ energy market. Any proposals for Illinois must include a plan to maximize capacity from all of Illinois’ diverse renewable energy sources and provide financeable solutions for a deregulated market,” Gray added.
The Path to 100 Act would increase state investment in renewables by raising the cap on the amount utilities can increase rates to pay for renewable energy. Per the legislation, that cap would go up to about 4 percent from 2 percent. They warn of a “funding cliff” in 2021 if the changes are not made.
The Illinois Chamber of Commerce has opposed fast action on capacity market reforms as well and is an opponent of CEJA.
“We should not risk electric reliability and unnecessarily increase costs on Illinois consumers before this process plays out and we fully understand the impact on electricity prices and the competitive market,” Chamber President Todd Maisch said in a statement.
Another major hurdle facing the legislation is the fact that capacity market reforms would benefit nuclear generator Exelon, whose subsidiary ComEd has been the subject of FBI raids and an ongoing investigation.
Members of the coalition said Tuesday, however, the company was “not anywhere on our radar screen” in negotiations.
Aside from the capacity market changes, CEJA would also provide financial and other assistance to environmental justice communities as well as communities and workers impacted by coal plant retirements; develop transportation electrification to “give Illinoisans access to cleaner and more affordable forms of transportation;” and expand energy efficiency programs.