The latest and biggest thing now holding up the state’s green energy bill

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Though some say a compromise now is within reach, it appears the deal will inevitably, in the Illinois way, stick electricity users, homeowners and businesses alike, with a bill of up to $125 million.

Specifically at issue is a controversial clause that was inserted in the huge energy package that lawmakers were unable to pass before adjourning earlier this month. The clause generally would require developers of new wind- and solar-powered generation facilities to pay the union prevailing wage to construction workers. Senate President Don Harmon has said the issue is one of the two biggest things holding up passage of the bigger energy bill.
 
Organized labor, which has been flexing its muscles lately in the Democratic-run Capitol, feels very strongly about the issue given that other portions of the bill eventually would close unionized fossil fuel-fired plants.

“The prevailing wage can be transformational in terms of getting people into the middle class,” says Pat Devaney, secretary-treasurer of the Illinois AFL-CIO. Since green-energy providers would get hundreds of millions of dollars in state tax credits under the bill—and since “many recent (green) projects have been built by out-of-state contractors paying substandard pay and benefits”—labor can and did step up.

But then groups representing small Black and Latino-owned firms that just are starting to get into this line of work objected, saying that they couldn’t afford to pay prevailing wages of $60 or more an hour to install solar panels on a six-flat apartment building or the like. So another clause was added. With the backing of Gov J.B. Pritzker, it would exempt “equity eligible” contractors from the prevailing wage requirements for five years—and even longer in some circumstances.

Said Pritzker’s office in a summary sent to bill negotiators just before adjournment: “The governor’s office remains ready to assist in developing solutions that ensure the renewable energy industry reflects the diversity of the state and leads to good-paying, union jobs for all.”

Initially, labor signaled that it might go along with the exception, insiders say. But then labor negotiators balked, arguing that it would be unfair to have different pay rates for people doing the same job for different companies. In response, labor floated a plan to spend about $10 million a year for five years to subsidize minority-owned contractors who want to build green facilities but can’t afford to pay the prevailing wage now.

Green groups say that’s not enough. And now, according to Sen. Christine Castro, D-Elgin, the chief Senate negotiator on the energy bill, there is agreement to provide up to $25 million a year for five years. The only issue still unresolved is how to backstop that plan to guarantee that the money will be available, she said.

Where would that money come from?

“Don’t assume” it’s from electricity users, or ratepayers, who eventually will have to pay all of the other costs and subsidies envisioned in the energy bill, Castro said. “There are other options,” she added, declining to name them.

Not everyone in Springfield agrees with that view. “There are no other options,” says Illinois Manufacturers’ Association President Mark Denzler. “Ultimately, it all comes from the ratepayers.”

So, perhaps there is a deal that satisfies both organized labor and minority contractors. If there is—and that’s a big if—then lawmakers can try to resolve some of the other major issues holding up passage of this gigantic energy bill.

via Crain’s Chicago Business

June 23, 2021 at 07:46AM

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