Leading the charge are two of the state’s most politically influential business interests, the Illinois Manufacturers’ Association and the Illinois Retail Merchants Association. Both, particularly IRMA, have been supporters of past energy initiatives that resulted in modestly higher costs for their members.
But this measure, they say, will cause a negative impact far beyond those past efforts. Indeed, one of their central complaints is that the Pritzker administration, along with Democratic lawmakers, haven’t issued cost estimates for the bill, which continues to evolve at this late stage even as senators and representatives supposedly are set to vote this week.
The manufacturers estimate the measure will raise electricity costs for its members by 10 to 15 percent. The retailers project 8 to 12 percent for their members. And both say those are conservative estimates.
“We’ve never said we won’t pay higher costs,” IRMA President Rob Karr said in an interview.
The retailers and manufacturers both support more investment to maintain reliability. They point to the woes in Texas—on display again this week as the state’s power grid manager calls on consumers to reduce consumption during a modest heat wave—as evidence of what Illinois needs to avoid.
But Karr bemoaned the lack of cost estimates and said he worries “Illinois is throwing away what everyone agrees, other than its geography, is one of its only economic advantages.” One of the positive byproducts of power-generation deregulation in the late 1990s is that Illinois consumers and businesses benefited from the subsequent drop in wholesale energy prices. Illinois went from one of the nation’s highest-cost energy states to one of the ten cheapest.
The question now is whether the last-second public opposition will have any effect. Pritzker has made passage of the energy bill a high priority, and his administration struck a deal with Exelon in which a cheaper round of subsidies from those enacted in 2016 would preserve its fleet of Illinois nuclear plants. At that point late last month, Pritzker and Democratic leaders thought the bill, which seeks to eliminate carbon-emitting power sources in Illinois within 30 years, was a cinch for passage.
It’s not, though, in large part because of the continuing dispute over the measure’s mandated closure of the Prairie State coal-fired power plant in southern Illinois, which a large number of municipally owned utilities, including some in the western suburbs, are contracted to pay for over decades.
It appears as of now there aren’t enough votes to pass the bill without some relief for those municipalities. What form that takes lawmakers surely will attempt to negotiate this week. That gives business interests an opening to slow down the process, particularly if the stalemate over the plant continues.
The Pritzker administration says the business organizations were part of a series of working groups that met since late last year to discuss various issues the bill tackles. That’s true, they say, but when the real negotiations took place over the past month, they weren’t invited to the table.
“The working groups were not negotiations,” Karr said. “They weren’t real debates. They were presentations of topics.”
In the meantime, there’s no estimate for what the bill will cost businesses and consumers for electricity. But there’s no question it will be more—and potentially a lot more. The measure promises nearly $700 million over five years to Exelon for its nuke bailout. It promises more than $200 million per year for support of new solar and wind development. It pledges more than $200 million annually for various energy-oriented social programs, including electric-vehicle infrastructure and “equity” investments. All of that will be charged to ratepayers in the form of surcharges on their electric bills.
The price tag doesn’t include the likely higher—but undefined—costs for delivering electricity that ratepayers will owe ComEd and Ameren Illinois under the legislation.
Unlike in past energy bills, there are no caps imposed on how much rates can go up. That serves two purposes. It ensures the money for the various interests doesn’t run dry, as it has for new ratepayer-funded solar development under the 2016 Future Energy Jobs Act. And it prevents critics from providing a solid cost estimate for how much ratepayers will have to shell out to support all of these mainly private-sector interests.
“That’s the biggest problem,” IMA President Mark Denzler said in an interview. “We don’t know” the true cost.
Supporters of all the spending shrug off the business critique, saying that industry adopts the same stance every time the state takes up a major energy bill. But in IRMA’s case, that’s certainly not true. That the retailers are adamantly opposed shows that business interests are together on this one.
Will that make any difference? So far in the Pritzker years, business objections have mainly been ignored on virtually every bill in which business has a stake. But this is the most significant energy legislation the state has pursued since the 1997 deregulation law. Manufacturers alone consume about a third of the power produced.
With the bill still not soup and the votes not there yet, who knows?
via Crain’s Chicago Business
June 15, 2021 at 06:48AM