Nuclear power struggle winds up in court
CLINTON – Smoldering resentment over the new law that saved Clinton Power Station – and its 700 jobs – has now flared into a federal lawsuit.
Filed on Valentine’s Day, the suit expresses no love for the Future Energy Jobs law and asked a federal judge to block the legislation, which is due to take effect in June.
The law guarantees the survival of the Clinton nuclear power station and another nuclear plant in Quad-Cities for 10 years by offering taxpayer subsidies worth up to $235 million a year to top up the price paid for the stations’ electricity.
Exelon Corp., the owner of both stations, said they were both losing money and faced closure without cash help. It also claimed the subsidies would help even the playing field with other nongreenhouse gas producing energy sources like wind power, which have enjoyed substantial tax breaks.
The lawsuit was filed by several rival power producers, including Dynegy Inc., which once owned the former Illinois Power Co. in Decatur and which runs natural gas and coal-fueled power stations, and a trade group, the Electric Power Supply Association.
They allege the new law is fundamentally unfair and skews the wholesale power marketplace at the expense of power customers because rivals without the advantage of subsidies won’t be able to compete, causing prices to, eventually, rise.
The lawsuit also claims Illinois lawmakers acted unlawfully and unconstitutionally by interfering in a regional wholesale power market that is under the ultimate control of a federal agency, the Federal Energy Regulatory Commission, or FERC.
Running to some 40 pages, the lawsuit spells out the price advantage the two Exelon nuclear stations will enjoy for their power, priced in blocks called megawatt hours, or MWhs. Current prices now, set at regional power auctions, run at $18 and $25 per Mwh for Quad-Cities and Clinton respectively, but will be topped up by taxpayer payments worth another $16.50 per Mwh under the new law
“As a result, in 2017 the Quad-Cities and Clinton plants will be paid a total of $34.50 or $41.50 per Mwh of energy that they sell in FERC-regulated wholesale markets,” the lawsuit said. “While a competing energy generator at the same location would receive just $18 or $25 per Mwh.”
Proponents of the law have been quick to hit back. Aside from the plant jobs saved for towns like Clinton, plus the $13 million nuclear energy contributes to the Clinton-area tax base, advocates point to many other provisions in the law designed to spur the state’s renewable power sector, grow jobs, and encourage energy efficiency.
The Illinois Clean Jobs Coalition, which backs the law, issued this statement: “This lawsuit will not stop Illinois from implementing the biggest clean energy breakthrough in its history, which will create tens of thousands of new jobs across Illinois, save customers billions on their electric bills and make Illinois a national leader in the clean energy economy.
… “(The) lawsuit suggests that big polluting industries would rather shackle Illinoisans to higher costs and dangerous fuels of the past rather than invest in Illinois’ bright, clean energy future.”
But a vast array of manufacturers, some of the biggest consumers of power in the Land of Lincoln, aren’t buying that argument and would be delighted to see the new law short-circuited in federal court.
Tate & Lyle, which has major agriculture processing operations in Decatur, isn’t sure just how much the new law (which runs to some 500 pages) is going to pump up its power bills, but the firm is bracing for the worst.
“And we already pay millions of dollars a year in electricity costs,” said Chris Olsen, vice president for community and government relations.
But even given a power bill of that size, however, Olsen said the deregulated power market in Illinois, which allows customers big and small to shop for electric suppliers, has nevertheless worked well and made the state very competitive on energy costs.
“Now this new law has the potential to negate the entire advantage we’ve seen,” Olsen added.
How much will the new law cost families and businesses? Estimates vary, depending on who crunches the numbers. Supporters of the law point to built-in rate caps and say, over 13 years, price hikes are capped at 1.3 percent for industrial customers and, for Ameren Illinois residential customers, the cap works out an average of 35 cents a month.
But critics say there are other costs built-in that are not included in the caps. The Chicago-based Better Energy Solutions for Tomorrow Coalition, or BEST, says there will be a new charge, for example, on every residential bill to pay for energy efficiency programs that starts out at $3.94 a month and hits $6.56 a month by 2030.