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Electricity markets are at the center of Illinois plant closures

A battle over power is shaping up in Illinois. It involves lawmakers, but unlike with the state budget crisis they are not playing a central role. This fight involves electricity plants, regulated and unregulated energy companies and the nonprofits that act as air traffic controllers for the electric grid.

Texas-based Dynegy is taking at least three power stations off-line this year, which will reduce generating capacity in southern Illinois by 30 percent. The utility says it’s not cost effective to keep the plants operating.

The main reason behind the decision relates to electricity auctions held by the system operators. In most of Illinois, the Midcontinent Independent System Operator, which prefers to go by the acronym MISO, oversees the auctions and monitors the grid.

“We don’t own any power plants. We don’t own any transmission lines,” says Corporate Communications Manager Andy Schonert.

“Our job is to make sure the grid runs as reliably as possible and it’s as efficient as possible.”

Suppliers like Dynegy put some of their power into the system with the hope of making enough money at auction to break even, or possibly turn a profit. But that’s not happening. Dynegy says it’s not getting enough money back.

“Because the market doesn’t send the proper price signals to the generation in southern Illinois,” says Dynegy Vice President of Regulatory Affairs Dean Ellis, “it’s putting economic and financial pressure on those generators.”

The utility has already taken drastic steps: shutting down the power generating station in Wood River and mothballing some operations at facilities in Baldwin and Newton.

In other parts of Illinois, the grid is managed by the regional transmission organization, PJM. Dynegy wants it to handle the entire state.

“That market is predominantly competitive generators. And the prices are more correct. They are more proper and they value the attributes of generation,” says Ellis.

Read full article at 90.7 KWMU