Exelon Generation and Commonwealth Edison (ComEd) announced on November 30 that they had reached an agreement with Illinois Governor Bruce Rauner (R) on the controversial Future Energy Jobs Bill (SB2814), House Amendment 3. Under the terms of the agreement, the parties are mandating a cost cap on all measures within the bill. Overall, the amendment aims to trade job guarantees for plant subsidies.
The new wording is intended to limit rate increases to all residential and business customers. The effect on business ratepayers had been of special concern to Governor Rauner.
The amendment includes protections that limit the impact of the legislation to all business classes at 1.3 percent, compared to their 2015 rates; and to cap the impact to residential customers at 25 cents per month for the average ComEd residential customer. Ameren business and residential customers would receive similar protections.
The revised proposal also retains key provisions to preserve 4,200 jobs at Exelon’s Clinton and Quad Cities nuclear plants; which Exelon had informed the Nuclear Regulatory Commission last June that it planned to retire, unless it received support from the legislation.
It prevents the loss of $1.2 billion in economic activity generated by the plants and an estimated $10 billion in increased costs associated with higher carbon emissions that would occur if the plants closed, Exelon has said – asserting that, when all of the economic impacts are calculated, benefits of the legislation far outweigh costs.
Indeed, Exelon and ComEd aver, the bill has gained broad support from more than 200 business, labor, environmental, faith-based, and other groups, including the Chicagoland Chamber of Commerce and Illinois Retail Merchants Association, the announcement said – adding that it also has support from members of the Clean Jobs Coalition, which includes the Citizens Utility Board, Natural Resources Defense Council, Sierra Club, Environmental Defense Fund and others.
However, others disagree. The BEST Coalition – which says it comprises “business, government and consumer groups as well as small and large businesses working to protect struggling Illinois ratepayers from rate increases caused by the proposed $1.6 billion Exelon bailout” – issued a negative analysis of House Amendment 3 on November 29.
Using the “industry standard economic modeling tool, IMPLAN,” the group said it evaluated the amendement. Its findings: “Despite an overall lower price tag, because of changes in the bill’s structure; Exelon’s legislation would now [result in the loss of at least] 44,000 jobs through 2030, while slashing economic output in Illinois by $14.7 billion, and reducing state and local government tax revenue by $429 million. While Exelon has made further changes since our last analysis, it would still be the largest rate hike in U.S. history at $13.3 billion,” the BEST coalition claimed.
Indeed, the coalition said, the rate hike is more likely to be $4.54 a month over the life of the measure for ComEd customers, and $2.01 a month for Ameren customers.
And, the State Journal Register Editorial Board pointed out on November 30, “Their discrepancies don’t stop there. Exelon says keeping the plants open would save 4,200 direct and indirect jobs in Clinton and Cordova, and preserve $1.2 billion annually in economic impact — all while keeping Illinois’ energy rates low, one of the few perks the state has when attempting the herculean task of trying to lure companies to a state often seen as unfriendly to business.
“BEST, though, claims the measure would cost Illinois consumers $13.3 billion in rate hikes through 2040 and those increases would chase away prospective businesses,” the newspaper editorial board pointed out. “BEST estimates that would in turn cost (through 2030) about 44,000 jobs, $14.7 billion in economic activity, and $429 million in state and local revenues.
“It’s hard to know who to believe, as both sides have impressive support” the State Journal Register concluded. “But after nearly two years of discussions on this measure, there should be firm answers.”
The local news outlet reminded readers, “The devil is in the details, and there are too many unknowns at this point for legislators to take a leap of faith that this is what is best for both the state’s citizens and industry.”
Editor’s Note: On December 1, the final day of the fall veto session, the Illinois House voted 63-38 and the Senate voted 32-18 in favor of a massive package that will funnel $235 million in annual ratepayer subsidies to the unprofitable nuclear power plants and increase investments in renewable power and energy efficiency, according to a December 2 report in the Quad City Times. Governor Bruce Rauner said he will sign the bill when it reaches his desk.