Exelon Nuclear Plants Getting Assistance in New York and Maybe in Illinois

Norris McDonald at Fitzpatrick

The New York Public Service Commission (PSC) voted to pass the Clean Energy Standard (CES) supporting the Zero Emissions Credit (ZEC) program for New York's nuclear fleet on Monday, August 1.  Monday's vote by New York utility regulators approving nearly half a billion dollars in annual subsidies over the next two years for Fitzpatrick, Nine Mile Point and Ginna nuclear power plants.  Exelon Corp., owns two of the plants and is in talks with Entergy Corp. to buy Fitzpatrick.

Chicago-based Exelon's announced plans to shut the Clinton and Quad Cities nuclear plants in Illinois in mid-2017 and -2018.   The Illinois legislature is considering a measure similar to the New York CES and ZEC to keep the two plants open.

Just as in New York, where the nuclear subsidies are attached 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 a recent 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 since the General Assembly adjourned on May 31 without taking action. Two days later, Exelon announced plans to close the two nuclear plants.

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.

Norris McDonald & colleagues at Clinton Plant

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.

While there are similarities between New York and Illinois, including the owner of the affected 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."  (E&E News, 8/3/2016)