Latest Post | Last 10 Posts | Archives
Previous Post: MLB open thread
Next Post: *** UPDATED x1 *** Elected Chicago school board bill advances as mayor ramps up opposition
Posted in:
* From this past January…
The Pritzker administration has hired an outside firm to scrutinize Exelon’s claims that some of its Illinois nuclear plants are losing money.
The Illinois Environmental Protection Agency early this month finalized a $215,000 emergency contract with Cambridge, Mass.-based Synapse Energy Economics. The firm, which has done work in the past for consumer advocates like the Illinois attorney general’s office and the Citizens Utility Board, will report back on the financial condition of the nukes by April 1.
It’s tasked with auditing the company’s plants, assessing costs and revenues given now and projecting over the next five years, according to the emergency purchase statement. Among the qualifications the Pritzker administration specified for the role was that the firm chosen could not have done work for Exelon in the past. That disqualified a fair number of bidders.
The move comes as Exelon for the second time in four years has said it would shutter nukes in Illinois unless they’re subsidized by the state. In August, the company announced it would close the Dresden and Byron reactors this coming fall without government action.
* Click here for the completed audit. And here’s today’s Tribune story…
Synapse Energy Economics concluded that keeping Byron and Dresden open would cost dramatically less than the $235 million-a-year bailout negotiated in 2016 by former Republican Gov. Bruce Rauner — a deal that prompted Exelon to back down from its plans to close two other nuclear plants outside the Quad Cities and downstate Clinton. […]
Unlike the Rauner bailout, which guaranteed Exelon subsidies for a decade, Synapse said the Pritzker administration could limit special payments for Bryon and Dresden to five years and provide them during each of those years only if the company opens its books and proves the power plants need the money. The program would cost $150 million a year at most, according to a redacted copy of the audit shared Wednesday with the Chicago Tribune.
It remains unclear if the findings will provide enough political cover to muscle another subsidy package through the Democratic-controlled General Assembly, which is still roiling from a multiyear bribery scheme involving jobs, contracts and payments from ComEd to allies of former House Speaker Michael Madigan.
But there are significant climate and labor ramifications if Byron and Dresden close.
* WBEZ…
The Pritzker administration’s study, released Thursday, found the plants “do face real risk of becoming uneconomic in the near term.
“This has implications for Illinois’ policy goals because the plants generate carbon-free electricity that is currently undervalued or even ignored within current wholesale electricity markets,” the report by Cambridge, Mass.-based Synapse Energy Economics concluded.
“In addition, the plants employ hundreds of workers directly and contribute to the economies of numerous Illinois communities,” the report continued. “Illinois could reasonably determine that it is in the public interest for the plants to remain in operation, warranting public support.” […]
But whether the company believes roughly a $70 million increase in annual ratepayer subsidies is enough, as Synapse recommends, is another question. Legislation pushed by labor unions aligned with Exelon recommends subsidy levels roughly quadruple what Synapse proposes for the two plants, administration sources said.
“To anyone who’s making a proposal on this that says these numbers are too low, we’re going to want to see their math,” said Deputy Gov. Christian Mitchell, the governor’s point person on utility legislation.
* Crain’s…
Pritzker is likely to advocate for setting Illinois’ first-ever price on carbon, which would be paid by generators whose plants emit the heat-trapping gas. A modest price, similar to what Northeastern states have imposed for years, would reduce the need for direct subsidies to Exelon. In that case, only Dresden would need support to remain open, the report said. […]
Synapse’s methodology for assessing the plants’ financial health differs from Exelon’s. The auditor questioned the large amount the Chicago-based company labels a “cost” when it in fact is a cushion for scenarios in which the plants don’t operate. […]
Asked whether the governor’s support for another bailout is, in effect, rewarding past bad behavior by the company, [Deputy Gov. Christian Mitchell] said there are clear differences this time compared with four years ago, when the company demanded that policymakers take its word that plants were losing money. “There was a reason Gov. Pritzker called for an audit,” Mitchell said.
The state has more information than it’s ever had on plant financials. And the governor will support only the minimum amount needed by the plants to remain in the black, as well as annual audits. If the plants don’t need as much money in a given year, the subsidies should decline, Mitchell said.
The question will be if organized labor, which is supporting a much larger bailout, can agree.
* Related…
* Chicago biz figures exit ComEd board while CEO is paid like 2020 was a good year
…Adding… Illinois Clean Jobs Coalition…
“We applaud Governor Pritzker for requiring this independent audit, and putting consumers and the goal of 100% clean energy ahead of utility profits. The Synapse study proves there are many different ways Illinois can keep producing carbon-free electricity from nuclear plants, without the giant subsidy Exelon and their allies are demanding. Putting Illinois on a path to a carbon-free power sector by 2030 by passing compressive energy policy as proposed in the Clean Energy Jobs Act (CEJA) is critical to combating climate change, creating equitable jobs, and ending excessive subsidies to fossil fuels.”
posted by Rich Miller
Thursday, Apr 15, 21 @ 9:09 am
Sorry, comments are closed at this time.
Previous Post: MLB open thread
Next Post: *** UPDATED x1 *** Elected Chicago school board bill advances as mayor ramps up opposition
WordPress Mobile Edition available at alexking.org.
powered by WordPress.
Getting this information thru an audit is a smart move. Better evidence to support rational decision-making is always valuable.
Comment by walker Thursday, Apr 15, 21 @ 9:40 am
Given the evidence from the audit, a higher subsidy is politically unlikely.
If the choice is between a small subsidy and a plant closing, the union members better be calling union leadership and making their thoughts known. Now is not the time to gamble …
Comment by RNUG Thursday, Apr 15, 21 @ 10:58 am
Wait just a minute: is this audit saying that Exelon grossly exaggerated their need for the last 6 years??? Shocked I tell you, just shocked!
Comment by Karen is upset Thursday, Apr 15, 21 @ 12:36 pm
Let me get this straight — a for profit company has failed to adequately maintain their capital asset which also has the legitimate risk associated with it of creating a catastrophic failure that blows radioactive fallout across the state and around the world and they want the taxpayer to foot the bill for it?
This is the same company recently admitted that it was guilty in an intentional criminal effort to bribe our leaders asking for another handout while their executives and share holders get rich?
If there is a legislative fix to this it needs to assign the responsibility to this onto the for profit company that has failed to live up to their up to even reasonable expectations of social responsibility.
This isn’t my policy area, but maybe the state should be forcing Exelon to provide the State of Illinois and thereby the People of Illinois equity shares in the company in order to allow us to benefit from our repetitive bailouts of this for profit company that’s annual revenues are typically over 33 billion dollars.
It’s time for the people of Illinois to receive an ownership stake in the company we keep paying for.
Comment by Candy Dogood Thursday, Apr 15, 21 @ 2:24 pm
Does anyone know what kind of carbon price the governor might propose? He mentioned a market based program in his 8 principles speech last August and gave the Regional Greenhouse Gas Initiative as an example of what other states are doing. Would Pritzker propose that IL join RGGI as well?
Comment by Clean Energy Curious Thursday, Apr 15, 21 @ 3:08 pm