Exelon makes another try for energy changes that critics call bailout
Exelon is trying to orchestrate an unlikely end-of-session deal to pass far-reaching legislation to prop up what it says are financially struggling nuclear power plants, threatening to close them and eliminate hundreds of jobs if lawmakers don’t act.
The scene is a repeat of last year, when the energy giant made a similar ask. That request went nowhere as legislators were consumed with a different power struggle — their budget battle with Gov. Bruce Rauner — and critics said customers shouldn’t have to pay more for what amounted to an unnecessary bailout of a profitable company.
Little has changed in the political environment since then. Rauner and ruling Democrats in the legislature remain at odds over how to fix the state’s financial problems and keep schools open in the fall, leaving little room for attention to other issues.
But Exelon has bolstered its strategy this year by teaming up with subsidiary ComEd to try to win approval for tacking a surcharge onto electricity bills that would make the nuclear plants profitable. They’ve wrapped the proposal into a larger bill that would make sweeping changes to the state’s energy system and incorporate pieces of a measure pushed last year by alternative energy advocates.
The companies have sold it as a path toward reducing the state’s carbon emissions and a win for energy customers, saying the legislation would only raise ratepayer’s bills by about 25 cents per month while ensuring stability and improving Illinois’ energy markets.
Critics of the proposal say Exelon’s math is wrong and ratepayers would be on the hook for an average of $3 per month during the first 10 years, and more beyond then. They contend the changes would amount to a total rate hike of $7.7 billion over 10 years that would be paid by government, businesses and consumers.
The opposition group Better Energy Solutions for Tomorrow Coalition, a nonprofit organization made up mostly of businesses, estimates that Exelon and ComEd would reap $1 billion in guaranteed profits from the plan over a decade. Additionally, Exelon’s struggling power plants would get a subsidy of as much as $2.6 billion over that time. They’ve raised concerns about a number of proposals in the 316-page bill, but they say the Exelon portion illustrates that the bill was crafted to help the company, not its customers.
“I can’t think of a single thing in this bill that weighs in favor of the consumer,” said Dave Lundy, a public affairs communications consultant and director of the coalition.
Eighteen senators have signed on, including Maywood Democrat Kimberly Lightford, who says it “will pave the way to a cleaner, greater and more equitable energy future for communities throughout our state.”
Rauner has been noncommittal. His office says the legislation is “under review,” and that the administration “will continue working with legislators on proposals that balance the needs of communities facing closures with the potential impacts to ratepayers across the state.”
Democratic Illinois Attorney General Lisa Madigan blasted the legislation as “outrageous.”
“This proposal would force consumers to pay more only to boost the companies’ profits further,” Madigan said in a statement. “The legislature has more important matters to address than padding ComEd and Exelon’s profits.”
But the powerful energy companies, which make a lot of campaign contributions, hold enormous sway at the Statehouse and have been pumping up the pressure on lawmakers. They bused hundreds of employees to Springfield this week and staged a rally under the Capitol dome. Meanwhile, company officials and lobbyists have been working the halls in an attempt to build momentum for a last-minute vote on the plan.
So far, that effort has fizzled. As Exelon executive Joseph Dominguez put it: “All the issues surrounding the budget are sucking up all the oxygen in Springfield.”
Exelon says that if lawmakers don’t act on the bill before they adjourn on Tuesday, the company might move forward with plans to close its Quad Cities and Clinton power plants. A third plant slated for closure last year was removed from the list this time around.
Critics say the threat is unreasonable, given the overall profitability of the company, which cleared $2.27 billion last year.
Exelon officials counter that it’s unreasonable to expect the company to accept losses at the struggling plants, which it says have gone more than $800 million in the red since
2009. They argue that the state rewards other companies for providing energy from renewable sources like wind and solar, without concern about those companies’ overall profitability.