The long-awaited fix to the Illinois renewables mandate has turned into an epic struggle for the state’s energy future.

Commonwealth Edison, the state’s dominant utility, has a plan (HB 3328) that would allow it to rate base a litany of smart grid and distributed energy investments.

Exelon, ComEd's parent company, also has a plan (HB 3293), designed to be complementary with its subsidiary's and protect its aging nuclear fleet from becoming unprofitable.

And a coalition of state political leaders, consumer advocates, renewables stakeholders, and environmentalists has a third plan (HB 2607) that supporters say will cut carbon faster and protect ratepayers from higher electric bills. 

“The Low Carbon Portfolio Standard (LCPS) can work well with the existing RPS, energy efficiency and other Illinois clean energy programs,” according to Exelon and ComEd Spokesperson Paul Elsberg. “We believe [the LCPS] has the advantages of being technology neutral and having strong consumer protections that other proposals don’t have.”

ComEd’s Future Energy Plan (HB 3328) reestablishes the Renewable Portfolio Standard (RPS) as a viable solution, Elsberg explained on behalf of the Exelon subsidiary in consultation with ComEd representatives. The FEP, he said by email, would require the Illinois Power Authority (IPA) to create a Renewable Resources Plan for procuring renewable energy that resolves the shortcomings of the current mandate.

“Exelon has been a strong supporter of the Illinois RPS and is committed to finding workable solutions to improve it,” Elsberg said. “Together, these proposals represent the most comprehensive, balanced and ‘all of the above’ energy roadmap for Illinois.”

The LCPS (HB 3293) provides financial support to the non-competitive plants in Exelon’s fleet “while supporting the continued development of renewable energy like wind and solar,” Elsberg explained. It would also, he added, be a bridge to compliance with the Clean Power Plan, the Obama administration’s ambitious national carbon reduction plan.

ComEd’s plan (HB 3293) would use the Smart Grid foundation the regulated utility has initiated to build community solar, energy efficiency, microgrids, and electric vehicle charging infrastructure, Elsberg said.

The ComEd and Exelon proposals are not mutually exclusive, but rather complementary. If approved together, the two plans would advance Illinois’ clean energy future and protect the state’s existing zero carbon generation assets, "the loss of which would have an enormous negative impact on state and local economies, grid reliability and the environment,” Elsberg wrote.

The Exelon proposal

Exelon’s LCPS would require regulated Illinois investor owned utilities, led by ComEd and Ameren, to purchase low-carbon energy credits for 70% of their power. Eligible sources would be solar, wind, hydro, nuclear, tidal, wave, and clean coal. The standard would sunset at the end of 2021, or when an EPA Clean Power Plan program supersedes it. It cannot increase electricity customer rates more than 2.015% above 2009 levels, or about $2 per month. Excess revenues would be rebated.

The LCPS’s language, however, stipulates that to be eligible to earn credits sources must meet a rigid capacity market standard that most variable-production utility-scale wind and solar power plants fall below. Because there is no commercial scale tidal, wave, or clean coal, Exelon’s financially challenged nuclear facilities would likely earn an estimated $300 million per year from low carbon credits while renewables would get virtually no support.

“Exelon’s bill would cost Illinois consumers $1.8 billion over 6 years to subsidize three of its eleven nuclear units,” said Environmental Law and Policy Center Executive Director Howard Learner. “Exelon is asking for a bailout even though the company made a $2 billion profit last year. Legislators are beginning to see the bill as greedy.”

A desperately struggling Illinois economy and Exelon’s recent successes in capacity market auctions, which some allege are the result of intentional manipulation, and lawmakers are only becoming more suspicious, Learner said. and allegedly manipulated successes in this year’s MISO capacity market auction only leave lawmakers more suspicious, Learner said.

The proposal faces opposition from both sides of the energy spectrum. Dynegy, a rival generation company with competing coal power plants in the state, is against the Exelon bill.

“It doesn't make sense that Illinois consumers and employers should be expected to subsidize plants that they already have paid for,” Dynegy’s CEO Bob Flexon recently editorialized. “Now's not the time for this.” 

Also stridently opposed to the utility proposal is the Clean Jobs Coalition, led by Chicago Mayor Rahm Emanuel, the consumer advocacy group Citizens Utility Board (CUB), and the state’s 400-plus clean energy businesses that already provide over 100,000 jobs.

The Clean Jobs Bill

For environmentalists and consumer advocates, the alternative to Exelon's plan is HB 2607, dubbed the "Clean Jobs Bill."

A rigorous CUB analysis validated by the Union of Concerned Scientists found the coalition’s Clean Jobs Bill would produce average consumer savings of $1.61 billion. The average residential customer would get a 7.86% bill reduction, amounting to $98.38 per year.

CUB’s analysis was based on historical electricity rates, past efficiency program performance, energy usage assumptions, key market costs, and inflation estimates.

With oversight from the Illinois Commerce Commission (ICC), the Clean Jobs Bill (CJB) would improve the state's energy efficiency by requiring utilities to cut demand 20% by 2025. It also makes non-utility providers eligible to participate and implements rate redesigns to protect utilities.

It would also rectify the existing RPS technical complications at the IPA and would increase the mandate from 25% by 2025 to 35% by 2030. To protect consumers, it would retain the current 2% of rates cap.

Both Exelon and ComEd agree the shortcomings of the current RPS must be handled by the IPA, according to Elsberg.

Finally, the CJB would answer Exelon’s LCPS with an state EPA-formulated and market-based cap and invest program to reduce emissions. Proceeds of the system would go to utility bill assistance for low income families, renewables and efficiency investments for the state, and jobs programs.

The ComEd proposal

Like the CJB, ComEd’s FEP would invest in “clean energy options,” such as community solar, energy efficiency, micro-grids, and electric vehicles, explained Elsberg.

ComEd filed its proposal later than and without the detail of the other two, Learner said. “It also breaks down the wall that has been firmly established by the legislature between competitive and non-competitive services,” he added.

ComEd would rate base the costs of its EV charging network, its micro-grid proposal, and its community solar program.

“But Tesla, Nissan, and NRG are already building EV charging stations in Illinois for free,” Learner said. “It is the same with micro-grids and community solar. ComEd’s parent Exelon has a wind subsidiary and could set up a solar subsidiary to compete with SolarCity and Sunrun. Why should ratepayers pay for ComEd to do those things?”

Renewables advocates are “alarmed” about ComEd’s proposed demand charge on all its customers, explained SolarCity Policy Deputy Director Aaron Kraus. In conjunction with a dramatic reduction in volumetric electricity charges, the unprecedented rate re-structuring “would rewrite the incentive to do distributed generation or energy efficiency in Illinois.”

The proposal’s language essentially bypasses the state’s regulators in the rate making process because it “directs ComEd to recover all additional fixed costs, including all transmission and distribution costs, through demand charges," Kraus said.

“This is fundamental rate redesign through legislation,” he concluded.

Two ways the politics could play out

“We look forward to working with the legislative sponsors of HB 2607 (the Clean Jobs Bill),” Elsberg noted, suggesting he, like most observers of Illinois politics, expects any final bill to be the result of negotiations recognizing elements of all three proposals. “We look forward to working with policymakers and all stakeholders.”

But, he pointed out, 3293, Exelon's bill, has “broad, bi-partisan support in both chambers of the Illinois legislature.”

Given the “dire straits” of the state’s economy, Learner said, lawmakers may want to delay any decision until the next session. If they do take on energy policy, they have two choices.

Legislators may defer big changes like the Exelon bailout but ask stakeholders to name the “one or two things really needed,” he suggested. “The RPS fix would be at the top of the list.”

It is an issue lawmakers have been hearing about for over two years, he went on. “It is ripe for action. Legislators know and understand it. It is not new or different.”

Political leaders may, however, demand that stakeholders “get in a room and agree on a comprehensive deal,” Learner said. But at present, Dynegy is pitted against Exelon, nuclear advocates are at loggerheads with wind developers, and the Chicago Mayor, Attorney General and consumer groups like AARP are deeply skeptical both utility proposals.

With that many divergent interests, "it is hard to see how all those folks can put together a grand bargain," Learner said. "It is not that there is no chance, but it is less likely.”

Looking forward: The Clean Power Plan

While the CJB offers “some good ideas,” Elsberg acknowledged, ”it fails to address the technology that produces more than 90% of Illinois zero-carbon electricity (nuclear) … [and therefore] is not an ‘all of the above’ approach.”

Exelon and ComEd “urge” Illinois lawmakers to enact their “entirely compatible” proposals in the current session because, Elsberg explained, they are “designed to act as a bridge to the State’s eventual need to comply with the U.S. EPA’s Clean Power Plan.” 

That could be a reason to postpone the decision, Learner said. The EPA plan won’t be finalized until after the current legislative session ends May 31. Legal challenges could last another year.

“Legislators may want to not approve a billion dollar bailout for Exelon until they see what is really happening with the Clean Power Plan,” he said. “And there are other ways of complying than with nuclear power.”