Two long-delayed energy bills in Illinois that could make or break the state’s nuclear and solar industries have been left in limbo by the coronavirus pandemic.
Now, following the Wednesday recall of lawmakers to a special session next week after a two-month absence, backers of the two bills will have a brief opportunity to see them passed. Otherwise, they’ll need to wait for another special session that may or may not come later this summer or for a two-week “veto session” in the fall.
In any scenario, the timing will be tight.
Since last year, environmental groups, clean energy advocates and Exelon, parent company of Chicago-area utility ComEd, have been debating the best path forward for the state’s clean energy goals. In January Illinois Gov. J.B. Pritzker asked lawmakers to pass clean-energy legislation this year, but that was before COVID-19 led the General Assembly to stop holding formal sessions.
Next week’s special legislative session will be dominated by responses to the pandemic’s economic disruptions. But Exelon’s nuclear fleet and the Illinois solar industry both see a legislative fix as critical to their futures.
The Clean Energy Jobs Act’s nuclear protections
Exelon, the nation’s largest nuclear energy operator, wants any clean-energy bill to include a “fixed resource requirement,” or FRR, to allow its six Illinois nuclear plants to bid their capacity into a state-run system that prioritizes zero-carbon resources. Currently, Exelon’s nuclear plants participate in the capacity market overseen by mid-Atlantic grid operator PJM, which is dominated by natural-gas-fired generators.
Some of Exelon’s plants have failed to clear PJM’s recent capacity auctions, which pay for commitments to provide grid stability three years into the future. Exelon warned last year that three plants — Braidwood, Byron and Dresden — may be forced to retire early without an FRR alternative.
A similar FRR proposal is now part of the Clean Energy Jobs Act (CEJA), which combines a mandate for 100 percent renewables by 2050 with other carbon reduction, electric transportation and job creation policies. CEJA would give the Illinois Power Agency authority to create a capacity market for the northern half of the state served by PJM, with a tiered structure prioritizing carbon-free capacity before fossil-fueled generators.
That authority would enable Illinois to add new renewables, maintain its nuclear fleet and keep energy prices low, David Kolata, executive director of the Citizens Utility Board, a ratepayers advocacy group, said in a Wednesday interview. “Right now, we’re spending [up to] $1.8 billion a year for capacity in Illinois, and that overwhelmingly goes to fossil fuel. You can’t cost-effectively get to 100 percent clean energy unless you fundamentally align our capacity procurement with our state’s goals.”
Kolata said the need for capacity market reform is even starker now that the Federal Energy Regulatory Commission has ordered PJM to force state-subsidized resources — including Exelon’s Quad Cities and Clinton plants, which are supported by Illinois’ zero-emissions credit program — to use minimum prices that could force them out of the market.
FERC has yet to approve PJM’s compliance plan, which includes an option to push out its next capacity auction from August to the spring of 2021 if any state passes legislation changing its role in PJM’s capacity market, as CEJA would.
In a Friday earnings conference call, Exelon CEO Chris Crane said an FRR must be passed this year to give the Illinois Power Agency time to set up the new capacity market before April 2021.
The alternative, “to run an auction [that] is going to be potentially rejected without clarification, does not seem like the most efficient use of all of our resources at this time,” Crane said.
Path to 100: A simpler plan for helping solar
CEJA is backed by a group of environmental, consumer and labor groups that supported 2016 legislation that set a goal of 4.3 gigawatts of new solar and wind by 2030, cleaned up the mechanism the Illinois Power Agency uses to fund renewables and created the state’s first community solar program.
But renewable industry groups like Solar Energy Industries Association and the American Wind Energy Association say CEJA’s complexities — in particular, its reliance on an FRR — will make it hard to pass this year.
Their alternative, dubbed “Path to 100,” is more tightly targeted at renewing the solar energy incentives created by the 2016 Future Energy Jobs Act that are now running out of funding.
FEJA has driven growth in the solar market, with non-residential installations growing from 16 megawatts in 2018 to 49 megawatts in 2019, and utility-scale installations expected to grow from 3 megawatts in 2019 to 44 megawatts this year, according to Wood Mackenzie Power & Renewables.
But the “adjustable block program” created by FEJA has run into problems. Many community solar projects remain waitlisted after the funding allocated to them ran out late last year. The Illinois Power Agency closed its large solar installations program in March, and residential solar funding is expected to be depleted between September and December, Josh Lutton, president of Illinois solar installer Certasun, said in an interview this month.
The Path to 100 would increase the state’s 2030 renewables target to 40 percent and raise funding for stalled programs by increasing the monthly utility customers charges that pay for them. It would also make changes to net metering and interconnection rules.
“The renewable energy industry in Illinois is focused on the immediate funding crisis facing the state’s renewable portfolio standard. Passing the Path to 100 Act will allow renewable energy to continue growing while we evaluate potential action on capacity markets,” Path to 100 Coalition spokesperson Peter Gray said in an email.
Running out of time
It’s unclear how much work lawmakers will be able to accomplish on these dueling energy bills under the rules set for next week’s special session.
Lutton noted that the state’s solar installers are facing a double whammy of funding cutoffs and pandemic-related work restrictions and economic damage. “My fear is that, because of COVID-19, the General Assembly won’t have the bandwidth to take up a large package like Path to 100, and won’t do anything — and then the funding will run out.”
But it may be even harder to push through CEJA’s omnibus package.
“Our hope is, sooner rather than later, we can pass a comprehensive energy bill in the state,” Kolata said. “It’s just that given the timing of everything and the pandemic, it’s still up in the air.”