Another round of subsidies for Illinois’ nuclear power plants is justified to help meet Gov. J.B. Pritzker’s goal of 100% carbon-free electricity by midcentury, according to an audit of ComEd’s parent company that adds a new wrinkle to a long-running debate about the state’s energy future.
The audit of Chicago-based Exelon’s finances, commissioned in January by the Democratic governor’s administration, largely supports the company’s claims that its Byron and Dresden nuclear plants are increasingly unable to compete in energy markets, at least in the near term. Exelon is threatening to close both plants this fall unless the governor and state lawmakers approve another cash infusion from ratepayers.
Synapse Energy Economics concluded that keeping Byron and Dresden open would cost dramatically less than the $235 million-a-year bailout negotiated in 2016 by former Republican Gov. Bruce Rauner — a deal that prompted Exelon to back down from its plans to close two other nuclear plants outside the Quad Cities and downstate Clinton.
Ratepayers pay about $2 extra in their monthly bills to keep Quad Cities and Clinton open.
Unlike the Rauner bailout, which guaranteed Exelon subsidies for a decade, Synapse said the Pritzker administration could limit special payments for Bryon and Dresden to five years and provide them during each of those years only if the company opens its books and proves the power plants need the money. The program would cost $150 million a year at most, according to a redacted copy of the audit shared Wednesday with the Chicago Tribune.
It remains unclear if the findings will provide enough political cover to muscle another subsidy package through the Democratic-controlled General Assembly, which is still roiling from a multiyear bribery scheme involving jobs, contracts and payments from ComEd to allies of former House Speaker Michael Madigan.
But there are significant climate and labor ramifications if Byron and Dresden close.
“First, we care about good-paying union jobs and communities that need them,” Deputy Gov. Christian Mitchell said in an interview. “Second, and perhaps most importantly, the state’s nuclear fleet provides the vast majority of our clean power. Taking it away during our transition to renewable energy would force us to rely more heavily on fossil fuels.”
Environment and consumer groups are pushing to gradually phase out nuclear power in Illinois as more renewable energy is developed and industrial-scale batteries become more cost-effective to provide electricity when the wind isn’t blowing or sun isn’t shining.
Other factors affecting the future of the state’s nuclear plants include grid improvements that will carry wind power from the Great Plains into Illinois, and energy efficiency programs that reduce the demand for electricity.
Any additional subsidies for Exelon would be rolled into broader energy legislation that Pritzker and various interest groups are pushing to enact this spring. If the governor and lawmakers broker a compromise, it likely will borrow from proposals offered by labor unions, consumer advocates, environmental groups and energy companies.
Exelon reported $9.5 billion in earnings during 2019. Its six Illinois nuclear plants provided more than half of the electricity generated in the state that year, with Byron and Dresden responsible for about a fifth of the total, according to federal records.
The two at-risk plants employ more than 1,500 people and pay more than $63 million in local taxes, the company has said.
Dresden’s pair of reactors, which began generating electricity in the early 1970s, are two of the oldest in the nation. Operating licenses for the units expire in 2029 and 2031.
The first reactor at Byron is licensed through 2044, the other until 2046. They began delivering electricity to the grid during the mid-1980s.
“It is going to be very difficult to cost-effectively achieve our state’s decarbonization goals if nuclear plants close before coal and gas plants go away,” David Kolata, executive director of the nonprofit Citizens Utility Board, said last week during a webinar organized by the University of Illinois Extension. “That doesn’t mean it is an excuse for a blank check to Exelon. It doesn’t mean that not a single nuclear plant can close prematurely. But those plants are carbon-free assets that give Illinois a competitive advantage on the path to 100% clean, renewable energy.”