(The Center Square) – As lawmakers return to Springfield to handle matters on hold because of the COVID-19 pandemic, nuclear power provider Exelon is pressing for state assistance.
The state Senate will convene in the Capitol this week and the House of Representatives plans to gather at the Bank of Springfield Center to keep social distancing requirements while still maintaining the legally required count of lawmakers to pass legislation.
While the spring session agenda has some already heavy lifts, such as passing a budget, expanding vote-by-mail provisions, expanding healthcare, extending a hospital assessment law, and a response to the COVID-19 crisis, power provider Exelon is hoping lawmakers also pass legislation giving the company a new forum to sell subsidized power.
In the company's most recent earnings call, Exelon CEO Christopher Crane stressed that “the clock is ticking” for lawmakers to set up a separate market for the utility to sell its power. The need arose after federal regulators objected to the company offering its already-subsidized wattage on the PJM Interconnection wholesale market without price controls.
“We’re up against the clock and once those auctions are run, we’re confident that minimal to any of our clean megawatts will clear in that capacity auction. They’ll be replaced by fossil units, which is detrimental to the state’s goal of being 100 percent clean by 2030,” he said, later adding they’re in communication with Pritzker’s office and key lawmakers about the matter.
“We would hope that it would get done before the end of the session," he said. "That’s what we have stressed to give the [state-based power auction] time to be able to develop their own auction process that will allow us to break away on capacity needs for the state of Illinois from PJM.”
The Federal Energy Regulatory Commission ruled in December 2019 that PJM has to set a minimum price for wholesale power from state-subsidized sources offered in its auctions. The change makes Exelon’s commodity less competitive. Governors from states where Exelon is active, including Illinois, have asked PJM to delay the next auction to give them time to set up secondary markets.
WBEZ obtained documents that said the utility is seeking legislation that would allow it to keep $300 million in ratepayer funds it has already collected.
Neither state Reps. Ann Williams nor David Welter, the Democrat and Republican heads of the House Energy and Environment Committee, responded to questions regarding Exelon or any legislation. State Sens. Michael Hastings and Sen. Sue Rezin, who lead the Senate Energy and Public Utilities Committee, were also not immediately available for comment.
Offering Exelon a separate market to sell power in would likely result in higher energy bills, said Todd Maisch, president of the Illinois Chamber of Commerce.
“This is yet another subsidy of a business’ assets that are, admittedly by the company, profitable,” he said. “Those subsidies are going to be paid by all of the other businesses that are struggling to survive in today’s economic atmosphere.”
Others warned that lawmakers could mask a significant bailout to the well-connected utility as a green energy initiative.
“Exelon just wants a government subsidy, their rationale being that their profit margins have fallen quite a bit,” said Ike Brannon, senior fellow of the Jack Kemp Foundation and an Illinois native. “By redoing the distribution network, it would increase the subsidies that they give to Exelon. If the goal really is to do something to increase green energy, this doesn’t accomplish that.”
The request comes as ComEd, the utility branch of Exelon, is under federal scrutiny for its lobbying practices in Springfield. In a federal disclosure, the company said it was on the receiving end of two federal subpoenas regarding lobbying practices and its relationship with former state Sen. Martin Sandoval. The longtime Chicago Democrat, who headed the powerful Senate Transportation Committee, pleaded guilty to corruption charges in January. He’s been cooperating with investigators. No one in the company has been charged with a crime.
Gov. J.B. Pritzker said the state has more pressing issues when asked about his knowledge of the utility’s push for state assistance.
“I’ve said that we’re going to make sure that we work on an energy package for the state and we don’t need the high-paid lobbyists to be guiding that for us,” he said at a news conference earlier this month. “I can’t tell you when something will get passed on it. My hope has been that the legislature has been continuing its work in the working groups that have been created for it.”