Illinois’ Energy Plan Comes Up Short
While most people profess a desire to move our electrical grid towards more renewable energy, the government’s resources to incentivize such a thing are not infinite. We need our governments to be judicious in their attempt to transition our economy towards a cleaner future via the subsidies, tax breaks, mandates and rules it sets forth.
Unfortunately, the State of Illinois is about to provide an excessive bailout to one of the largest utilities in the U.S. as part of a larger clean energy bill that aims to put Illinois on the path to a carbon emissions-free electric grid by 2045, one of the fastest timelines in the nation. A clean energy grid is an admirable goal, but the cost of this legislation outweighs its supposed benefits.
Last week the Illinois House passed what amounts to one of the largest energy policy bills ever enacted by a state legislature. (The Senate passed the bill by one vote shortly thereafter) that sets forth a variety of subsidies for the state’s nuclear plants as well as a variety of other entities with a nominal attachment to the energy market. The bottom line is that there are more cost-efficient ways to spend and invest in a low-emission future besides allocating taxpayer dollars to these “too big to fail” companies.
The state’s plan has three distinct pillars: One would provide subsidies to several nuclear plants upstate operated by Exelon that the company has threatened to close—soon—without some sort of government support, which they claim is necessary because of the low prices on the grid abetted by a surfeit of natural gas power plants.
However, it’s not clear how much—or whether—the plants are, in fact, losing money, and this legislation lacks any basis of oversight and accountability. It is also worth noting that Exelon has recently had issues with its dealings with the government. Last year the Commonwealth Edison Company, a subsidiary of Exelon, was found guilty of participating in a years-long bribery scheme with the intention of increasing their profit margin. As a result, the deferred prosecution agreement required it to pay a $200 million fine, and the company is involved in a criminal investigation that has ensnared the former speaker of the General Assembly, Michael Madigan. However, that “fine” is small compared to the authorized $700 million in ratepayer subsidies in the recently-passed bill.