Illinois House approves energy policy overhaul that provides bailout for ComEd parent Exelon and sets course for carbon-free future

Illinois House approves energy policy overhaul that provides bailout for ComEd parent Exelon and sets course for carbon-free future

The Illinois House on Thursday approved an energy policy overhaul that would set a path to a carbon-free future while also putting customers on the hook for a nearly $700 million bailout of scandal-plagued Commonwealth Edison’s parent company.

With 71 votes needed, the measure passed by a wide margin, 83-33. It now moves to the Democratic-controlled Senate, which must approve the plan before it heads to the desk of Gov. J.B. Pritzker.

The Senate is set to return to Springfield on Monday — the same day ComEd parent Exelon has threatened to close its nuclear plant in Byron if the bailout doesn’t go through — to take up the House proposal.

The Democratic governor said in a statement after Thursday night’s House vote that he will sign it “as soon as possible, because our planet and the people of Illinois ought not wait any longer.”

It’s estimated the package would increase power bills for the average residential customer by about $4.50 per month, the measure’s sponsor, Democratic state Rep. Marcus Evans of Chicago, said during a committee hearing.

In the floor debate that preceded the House vote, Evans said passing the proposal would “send a message to the entire country that we’re serious about climate change, we’re serious about just transition, we’re serious about solar development, and we not only want to be a participant nationally but we want to be a leader.”

The plan has crucial backing from two of the majority party’s key bases of support: labor unions and environmentalists. Those groups have been at odds throughout the summer over how to phase out municipally owned coal-fired power plants in Springfield and near St. Louis.

The measure would set a target for the Prairie State Generating Station — one of the top industrial sources of carbon pollution in the U.S. — and Springfield’s city-owned plant to reduce climate-damaging emissions by 45% by 2035 and completely by 2045. If they miss the 2035 target, the plants would get an additional three years but could be forced to shut down generating units if necessary to achieve the 45% reduction.

A phased reduction in emissions from the plants, which was missing from a proposal approved in the Senate last week, was a major demand from Pritzker as part of his plan to combat climate change by putting the state on a path to 100% carbon-free energy by 2050.

“This bill provides a clear path to reducing our carbon emissions. It puts Illinois on a clear timeline to a greener economy. It makes significant investments in the development of renewable energy. It protects jobs and people in your communities,” House Speaker Emanuel “Chris” Welch of Hillside said Thursday, pointing across the aisle to Republicans, most of whom voted against the measure.

The overall plan still faces opposition from consumer advocates and others who argue that it is a costly giveaway to ComEd and parent Exelon after ComEd admitted in federal court last year that it engaged in a yearslong bribery scheme in an effort to advance its agenda in Springfield. That included a previous bailout for two Exelon nuclear plants in 2016.

Exelon has said it will begin shutting down its Byron nuclear power plant in northwestern Illinois Monday if lawmakers don’t approve a bailout for that facility and two other nuclear plants. The Dresden nuclear plant in Grundy County is slated for shutdown in November absent additional help from Springfield.

The company has argued that subsidies tacked onto customers’ power bills are justified because its nuclear plants, which produce large amounts of energy without spewing climate-damaging carbon dioxide, can’t compete with cheaper, dirtier fossil fuels and subsidized renewable sources such as wind and solar.

In addition to Byron and Dresden, Exelon’s Braidwood plant in Will County also would receive subsidies under the measure.

Senate Democrats have been briefed on the House plan but were not directly involved in the latest round of negotiations.

“The shared goal among the Senate, House and Governor Pritzker has been to position Illinois as a national leader on reliable, renewable and affordable energy policies,” Senate President Don Harmon of Oak Park said in a statement. “This proposal accomplishes that shared goal.”

The House plan would require most coal plants to close by the end of the decade and natural gas plants to go offline by 2045.

It also would provide renewed subsides for wind and solar energy projects, seek to boost job training for the clean energy industry and aim to put 1 million electric vehicles on the road by 2030, partly through a $4,000 rebate for consumers.

The proposal includes provisions aimed at preventing the type of misconduct ComEd admitted to in its agreement with federal prosecutors. Those include requiring state officials to disclose whether any immediate family members are employed by utilities and the creation of a new state position to oversee ethics and compliance at utilities. Utilities also would be required to hire a chief ethics and compliance officer.

Republicans who opposed the Democrats’ latest effort raised concerns about how taking fossil fuel-burning plants offline would affect energy reliability in the state.

“This is an energy bill; it’s not an energy plan whatsoever,” Rep. C.D. Davidsmeyer of Jacksonville said. “It has no plan for the future. It just has consequences.”

Others said communities they represent that invested in the Prairie State project would have to continue paying off bonds even as the plant’s energy production is reduced. Rep. Dan Ugaste of Geneva said his town, along with neighboring Batavia and St. Charles, “have been treated with no respect whatsoever.”

Even GOP members who supported the plan were critical of the way it was put together.

Rep. David Welter of Morris, whose district is home to Exelon’s Dresden, Braidwood and LaSalle nuclear plants, said Republicans were largely cut out of final negotiations.

“I don’t want any of you to think, on this side of the aisle, when you see some Republican votes up there that this was a bipartisan process because it was not. ... I have to vote my district. But this process is crap,” Welter said.

Supporters of the plan say it would end so-called formula rates, another major policy change approved during the years ComEd has acknowledged engaging in its bribery scheme. Rather than having to go before state regulators to win approval of a rate increase, formula rates guaranteed the company would reap higher profits from customers as it spent more on energy grid upgrades.

Consumer advocates dispute that claim, arguing that it would extend policies that guarantee profits for ComEd and downstate utility Ameren Illinois. Those policies would be more costly to power customers in the long run than the nuclear plant subsidies, Abe Scarr, director of the Illinois Public Interest Research Group, told the House Executive Committee on Thursday.

“The General Assembly is choosing to continue rewarding scandal-plagued ComEd with guaranteed profits,” Scarr said. “This outcome is absolutely unnecessary.

“As a matter of policy, we do not need to guarantee utility profits to eliminate carbon emissions from the power sector, nor to invest in renewable energy, nor to achieve other praiseworthy goals of this legislation,” he said.

Democratic Rep. Fred Crespo of Hoffman Estates, who voted in favor of the legislation, also raised questions about the rate structure, noting that portions of it mirror what ComEd was pushing for during its scheme.

“I sure hope that we come back and correct this mistake,” he said.

The proposal also faces opposition from business groups, including the Illinois Chamber of Commerce and the Illinois Manufacturers’ Association, largely over the potential cost for commercial and industrial power customers.

“Passing this legislation in its (current) form is going to eliminate one of Illinois’ biggest advantages,” Mark Denzler, president and CEO of the Illinois Manufacturers’ Association, said at Thursday’s hearing.

The current low cost of power in Illinois helps attract and retain businesses, Denzler said.