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Exelon subsidy package splits legislators; governor, utilities like plan


SPRINGFIELD – Some legislators are calling it a needless bailout, others deem it a smart move by the state after legislation was  passed by the General Assembly to keep Exelon’s nuclear power plants in Clinton and the Quad Cities operating.

State Sen. Kyle McCarter, R-O’Fallon, is among the critics of Senate Bill 2814, the Future Energy Jobs Bill, which the House and Senate passed on Thursday, Dec. 1. McCarter said the measure provides $8 billion in subsidies, which he calls bailout money.

“The money has to come from somewhere,” McCarter said. “This is a bailout for a very profitable company. $2 billion in profit last year. Their CEOs earned $31 million, but apparently just 5 percent of the profits wasn’t enough to save their own facilities.”

Under SB2814, Exelon will receive subsidies totaling $235 million a year for up to 10 years. There are also financial incentives for energy efficiency and so-called “green” energy such as solar and wind power that include utility companies, Com-Ed and Ameren.

McCarter said the money for the subsidies and incentives will come from ratepayers.

“It’ll be families who need relief and not an increase in their power bills and commercial and industrial users of electricity who are already struggling to stay in business in this state,” said McCarter. “

Exelon claims that without the financial assistance they would be forced to close their nuclear power plants in Clinton and Cordova, Illinois with a loss of hundreds of good-paying jobs and millions of dollars paid out in local property taxes, but Sen. McCarter said job losses will occur under the bailout plan as electricity rates rise and drive away business and industry.

“There are estimates that job losses statewide could be as high as 44,000. You won’t see them as a headline in the news happening all at once. It’ll be 25 here; 50 here,” said McCarter. “Large users of power such as ADM, Tate and Lyle, their number two cost for goods sold is energy.”

McCarter said the legislation disrupts the free market to pick winners and losers. He said nuclear wins and Illinois coal and ratepayers lose.

“We’ve had five coal plants in Illinois shut down. They weren’t bailed out by the Legislature,” said McCarter. “There was never a word about helping those clean and efficient coal plants and their employees. I have an obligation to defend the hard-working people of southern Illinois. Passage of this bill makes Exelon the big winner and Illinois ratepayers the losers.”

Having passed out of the House and the Senate, the measure will now advance to the governor’s desk for further consideration. The governor has indicated he will sign the bill.

Gov. Bruce Rauner released his own statemen:

“For months our administration has been very clear that any energy legislation should follow the guiding principles of protecting jobs, ratepayers and taxpayers. After dozens of hours of good faith negotiations, we have reached an agreement that aligns with those principles. This legislation will save thousands of jobs. It protects ratepayers, through guaranteed caps, from large rate increases in years to come. It also ensures taxpayers are not on the hook to keep the power plants open and online. We thank the rank-and-file legislators and stakeholders for their perseverance and commitment to seeing this through. This process shows that when all parties are willing to negotiate in good faith, we can find agreement and move our state forward.”

SB 2814 contains a guaranteed cap that energy prices cannot increase more than 25 cents on the average residential home, and cannot increase more than 1.3 percent on commercial and industrial users over the next ten years. Rates are projected to decrease for the first several years due to the utilities being able to amortize energy efficiency. It also guarantees the plants remain open for 10 years. Exempting the bill from prevailing wage reduced the cost of the bill, as well as, eliminating billions of dollars in special interest giveaways, Rauner’s statement said.

Ameren Illinois President Richard J. Mark said he believes the measure protects the interests of downstate customers.

“Senate Bill 2814 will enable Ameren Illinois to continue investing to strengthen the electric grid to improve service reliability and implement new energy efficiency programs,” Mark said in a statement. “Plus, it will keep two nuclear facilities operational, preserving more than 4,000 jobs and keeping energy supply costs lower.”

Mark said further: “From the first day this legislation was proposed, our singular focus was on ensuring that our customers weren’t unfairly saddled with higher monthly costs without the resulting benefits. What was once a proposed $2 per month bill increase is now a less than 12-cent per month increase and could result in a slight decrease in customer rates over the life of the plan. As a result, we have an energy policy that will pave the way for Ameren Illinois to continue a world-class energy infrastructure modernization program for central and southern Illinois. … No bill is perfect and not every stakeholder will be fully satisfied. In the end, the opportunity to work with all parties to stabilize employment, bolster energy efficiency programs and continue improving system reliability made this legislation worthy of support.”

Sen. Terry Link, D-Vernon Hills, said he opposed the legislation in part because of a lack of time to study the real legislation.

“This nearly 500-page bill barely reached our desk and we were asked to vote on it. This bill was continually changing by the hour. Honestly, I haven’t had the opportunity to study the real effects of this legislation,” Link said.

“The rate hikes on commercial customers means that job losses could occur because the cost of doing business in Illinois has gone up. My district can’t afford to lose jobs. So between the potential job losses and the lack of transparency in this whole process I could not support this bill,” Link said

The legislation passed on a 32-18 vote in the Senate and 63-38 in the House. Among supporters were Sen. Bill Haine, D-Alton. Among detractors were Rep. Dwight Kay, R-Glen Carbon, and Rep. Dan Beiser, D-Alton.

SB 2814 had a long list of supporters — more than 200 nonprofit groups and businesses, including Sierra Club Illinois, Illinois People’s Action, the Natural Resources Defense Council, Moms Clean Air Force, and the AFL-CIO.

One of its staunchest supporters was the Citizens Utility Board, a watchdog agency that traditionally has been one of the toughest critics of the utility industry. The agency sent multiple letters of encouragement to supporters, urging them to get behind the bill.

— From the Illinois Business Journal



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