Gov. J.B. Pritzker is supporting short-term subsidies for two threatened Illinois nuclear plants as part of a wide-ranging overhaul of energy policy his office says would put the state on a path to 100% clean power by 2050.
The proposal represents a balancing act for Pritzker, who is attempting to preserve high-paying union jobs at Exelon’s Byron and Dresden nuclear plants while also seeking accountability from a company whose subsidiary, Commonwealth Edison, has admitted to engaging in bribery in an effort to win support for legislation that included nuclear subsidies in 2016.
Exelon has threatened to close the two plants this year if it doesn’t get assistance from Springfield.
The governor’s plan, to be introduced in the General Assembly on Thursday, would provide less than $70 million in annual subsidies over five years for the two plants, according to Deputy Gov. Christian Mitchell, Pritzker’s point man on energy policy.
“What we don’t want to do is be in a situation where we are not just saving the good union jobs and the clean power at those plants but also providing additional shareholder subsidies so fat cats outside the state of Illinois can get richer,” Mitchell said.
The governor’s plan draws in elements of a proposal from clean energy advocates that would offer no subsidies to Exelon, and one backed by a union coalition that would offer much more generous and long-lasting support for the four Exelon nuclear plants that aren’t already receiving subsidies from the 2016 law, including two Exelon hasn’t threatened to close.
“Our view is that this proposal pulls together the best of all the proposals that are currently out there into one comprehensive package, and we think it’s a good place to start final negotiations,” Mitchell said.
Strengthening oversight and accountability for ComEd have been key points in negotiations after the company agreed in July to pay a $200 million fine and admitted it tried to curry favor with former House Speaker Michael Madigan by giving jobs and contracts to his allies.
Pritzker’s plan would require state regulators to investigate whether ComEd used money from its customers in connection with any of the conduct covered in the company’s deferred prosecution agreement with federal authorities and determine whether the company should pay restitution.
It also would require an annual audit of Exelon to assure any state support for the nuclear plants is financially justified and mandate that the company return any money it receives if it closes its plants without attempting to find a buyer.
Like the plan backed by clean energy advocates, the governor’s proposal would end the so-called formula rates that were part of one of the bills at the center of the bribery scheme. Rather than having to go before state regulators to win approval of a rate increase, formula rates guaranteed the company would reap higher profits from customers as it spent more on energy grid upgrades.
The backers of the union bill contend their plan would also end formula rates, but consumer advocates and state regulators have said the proposal could prove even more profitable for the company.
Long a powerful force in Springfield, ComEd has become a political liability and is remaining in the background during negotiations while its longtime allies in organized labor push for legislation that would benefit the company and its parent.
That creates a bind for Pritzker and other Democrats who rely on unions as one their strongest and more reliable bases of support.
The governor’s proposal to offer limited subsidies to help preserve roughly 1,500 power plant jobs comes as little surprise after his office released an independent audit earlier this month that justified the support. The audit provided justification for up to $150 million in annual subsidies, while state regulators have estimated the union-backed plan would cost more than $600 million per year.
Backers of the union plan blasted the governor’s office at a committee hearing last week, in part because large portions of the audit were blacked out in the public version to protect Exelon’s internal information.
ComEd has expressed remorse for its “past conduct” and expressed general support for “strong ethics practices” in energy legislation, but the company continues to argue that its spending on grid improvement that resulted from the bills passed during its scheme were necessary.
In addition to the issues relating to ComEd and Exelon, Pritzker’s plan calls for phasing out coal-fired power plants by the start of the next decade and natural gas plants by 2045 while providing support for workers who would be displaced to transition to new careers.
It also seeks to require union labor on large-scale solar and wind power projects and union-level wages on smaller projects.
With a goal of having 1 million electric vehicles on the road by 2030, the bill also would create a $4,000 rebate for car buyers and require electric utilities to create plans for creating the necessary infrastructure.