Will a deal on Illinois energy legislation come soon enough to save solar? | Energy News Network

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Garrison Riegel considers himself an eternal optimist. It might help explain why he launched his Chicago-based solar company, Celestar Solar, last year during the pandemic. But his sunny outlook was tested this week as legislation needed to renew solar incentives failed yet again to pass, more than a year after solar developers and advocates warned that the state’s nascent industry could be decimated without the renewal. 

In the final days of the spring legislative session that ended Monday, it looked like stakeholders who had argued bitterly over various aspects had reached near-consensus on an ambitious bill. Then the fate of the state’s largest coal plant caused an impasse at the last minute. Legislative leaders have promised to reconvene lawmakers in coming weeks to vote on the bill if an agreement can be reached. During an extended session, passing a bill requires two-thirds rather than a majority of votes. 

Riegel doesn’t know if he should get his hopes up yet again. The next regularly scheduled legislative session is a short veto session in the late fall. 

“As an industry we were hopeful this would happen last fall, that’s when it needed to happen to prevent layoffs,” he said. “Then we were holding out hope for the spring. Now if it’s pushed to the fall that will be really tough for a lot of folks in the industry, and there will be a lot of disappointed homeowners.” 

Riegel points to the massive waitlist for distributed and community solar incentives created by the 2017 Future Energy Jobs Act, before funding ran out. He hopes such evidence of widespread support for renewable energy will help build the final momentum needed to convince lawmakers to pass a bill.

The draft legislation many lawmakers are ready to approve — and most key stakeholders have agreed to support — would phase out coal-fired power by 2035 and natural gas-fired power by 2045, while providing $600 million over five years to three of the state’s six nuclear plants. 

The nuclear support had been the main sticking point threatening to derail the legislation, until nuclear owner Exelon and Gov. J.B. Pritzker reportedly reached an agreement. Then some unions, local officials and legislators demanded that the 1,600-MW Prairie State Energy Campus in Southern Illinois be granted an exemption from the declining caps on carbon emissions that would close coal plants. 

Clean energy advocates were furious.

“It’s really difficult to have a climate bill when you are exempting the largest polluter in the state and seventh largest polluter in the nation,” said Jessica Collingsworth, lead Midwest energy policy analyst for the Union of Concerned Scientists, a member of the Clean Jobs Coalition, which has for two years been pushing an ambitious bill called the Clean Energy Jobs Act. “That really put a stop to things.” 

A coal plant in crisis 

The Prairie State plant has been billed as a “clean coal” plant that aims to use carbon capture and sequestration, but it has long been viewed by many as a debacle that saddled municipalities with crippling debt for ballooning costs, even as promises of cheap energy have failed to materialize. The plant is owned by a consortium of nine public power agencies that made binding deals with more than 300 municipal utilities and electric cooperatives across eight states.  

“Normally if a coal plant is uneconomical, or the profit margins just aren’t big enough, it closes,” said J.C. Kibbey, clean energy advocate for the Natural Resources Defense Council, a member of the Clean Jobs Coalition. “But the ownership structure is so complicated with Prairie State that there is no one entity with their finger on the button who can stop it. This is the only way out, to close this down with deliberate declining caps administered through policy.”

Prairie State spokesperson Alyssa Harre said earlier this spring that “overly aggressive and unproven targets that call for the removal of fossil fuels prematurely or add unnecessary taxes will put customers at risk for increased energy costs and more frequent outages.”

But Kibbey pointed to multiple analyses that have shown a quicker shift to renewables and the closure of all coal plants will mean Prairie State’s customers will “break even, save a little or at most pay a little more” for energy. 

“We were very deliberate about soliciting input about the concerns” of municipalities with contracts with Prairie State, Kibbey said, and incorporating budget stabilization and relief measures into the bill to help those communities. 

“Especially if you monetize the environmental impacts of Prairie State,” he continued, “it just doesn’t make sense to keep running it.” 

While a bill reflecting the latest developments hasn’t been introduced yet, members of the Clean Jobs Coalition feel confident based on negotiations and earlier drafts that legislation will ultimately include extensive investments in just transition for communities impacted by coal plant closures, as well as equity and workforce development in the renewable energy economy. 

“We’re continuing to put the pressure on legislators and demanding action on climate,” said Collingsworth. “We’re sending out action alerts to our Illinois members. It’s a priority for the governor and obviously many groups to pass comprehensive climate and equity legislation. That’s giving me hope.” 

Nuclear and renewable funding 

The $600 million for nuclear plants that Pritzker reportedly agreed to is about double what the governor had originally proposed, based on a recent analysis of the fleet’s economic status, and more than many stakeholders including renewable companies wanted. 

A coalition of labor unions backed higher support for the nuclear plants, and the Clean Jobs Coalition backed capacity market reforms — which are apparently now off the table — that would have benefitted Exelon while also potentially securing savings that could have been invested in renewables. 

The compromise reached on nuclear power includes a promise that funds will be reimbursed if Exelon benefits from a proposed federal tax credit for nuclear. FEJA created subsidies for two of Exelon’s six nuclear plants, and three more of the plants would be subsidized under the latest agreement. Unlike the subsidies under FEJA which are picked up by customers statewide, only ratepayers in ComEd territory in northern Illinois would pay for the new nuclear supports. 

Dave Kraft, executive director of the Nuclear Energy Information Service, which opposes nuclear power, is among those who have long questioned whether Exelon would really close the plants without the subsidies it demands, and whether all the nuclear power is really needed. 

“It’s the same legalized extortion that has been going on for years,” Kraft said, with Exelon and its backers putting forth the message, “‘Woe is the state, jobs will be lost, the tax base will be destroyed.’ We don’t argue with that. But (the politics are) about the jobs, not the energy.”

Kraft said that when anti-nuclear activists pushed for support for workers and residents when the Zion nuclear plant closed in northern Illinois more than 20 years ago, the concept of just transition was novel. Today, it is a major component of the negotiations in Illinois, and of a movement nationwide.

“If anyone needs to be bailed out, it’s the communities and the workers, not the corporations, whether you’re talking about nuclear or fossil fuels,” Kraft said. “That’s why you have a just transition.”

Refusing to give up

Under the latest agreement, ratepayers will pay about twice as much per month to fund renewable development. The increase would be allowed by raising the cap on what utilities can charge for renewable investments, a measure supposed by both the Clean Jobs Coalition and renewable energy interests backing a separate bill called Path to 100. 

While supporters of the different bills have in the past been at loggerheads, advocates of a renewable energy transition seem now largely united around passing the legislation that’s been hashed out. 

“After weeks of negotiations, it’s been a long process, but I think currently it’s in a good place with agreement from the different parties in the room,” said Collingsworth. 

Riegel has worked as an electrician and solar installer in Illinois since 2007, when the state’s solar industry was tiny. He watched solar blossom after the Future Energy Jobs Act was passed, then face the “cliff,” as many have described it, when funding ran out. 

“FEJA was a huge success. It was amazing. I couldn’t believe that Illinois finally passed a piece of legislation that gave us working in solar hope that Illinois would be a major player in the market,” he said. While his young company has survived the past year, he’s holding off on hiring more employees and buying more work vehicles and equipment until incentives are restored. 

“I am confident that clear minds will prevail, but I’m not sure how long it will take or how many jobs will be lost before legislators can come up with some type of solution,” he said. “That’s my concern — not that it won’t happen but that it will take too long and jobs will be lost in the process.” 

Despite the recent disappointments and uncertainty, he has confidence in the end-game. 

“FEJA really demonstrated that there’s a huge appetite for solar in Illinois. I’m incredibly optimistic that the industry can be reignited and there will be a ton more solar installations. We’ll be closer to meeting our renewable energy targets in the state, and hundreds or thousands of jobs will be created in the process.” 

via Energy News Network

June 4, 2021 at 08:55AM

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