Heat Waves — In Red and Black | State of our electricity shortage

WILLIAM RAU

Illinois once exported 40% of its electricity generation. Now, we must import electricity. Between 2007 and 2020, 44 Illinois coal plants closed (EIA) thus eliminating a sizeable fraction of our generation capacity. Another 12 coal plants may close by 2023. Yet, our shortage is not due to coal closures, per se. Rather, it’s the failure to bring online new generation capacity to replace geriatric coal plants. The typical Illinois coal plant was built before Richard Nixon became president in 1969. Many of these plants could not compete in electricity markets and were losing money.

Which brings up another failure: The painfully slow roll-out of Illinois’ Renewable Portfolio Standard (RPS). As part of the 2007 Illinois Power Agency Act, the RPS mandated 25% renewable electricity by 2025. The Act created the Illinois Power Agency (IPA) to implement the RPS and to purchase electricity for ComEd and Ameren. Under deregulation, these two utilities sold their power plants and used electricity procured by IPA. Our so-called “wires-only” utilities now generate profits from transmission and distribution charges and sell IPA-procured electricity at cost.

IPA’s early electricity purchases occurred when coal and gas prices were exceptionally high resulting in multiyear, locked-in electricity rates that were soon 30% above wholesale electricity prices. Utility customers could buy electricity from either a utility or from third party aggregators and, for the years 2010-2013, aggregators offered huge discounts. As a result, more than 80% of Ameren and ComEd customers moved to municipal aggregation contracts — but with this catch: The RPS was funded through a utility bill tariff on monthly electricity charges. As customers abandoned purchase of electricity from utilities, RPS’s funding spigot was shut off. Expansion of renewables came to a screeching halt.

Therefore, a climate coalition wrote The Future Energy Jobs Act (FEJA) to “fix the RPS” and catch up with the 25/25 target. However, under Speaker Michael Madigan rules, energy bills were revised through “compromise” negotiations with a bill’s contending parties, chiefly Exelon and ComEd. During one negotiating session, Exelon dropped its edited bill on the table and walked out — it had Madigan in its back pocket (Jason Meisner & Ray Long, Chicago Tribune, March 2, 2022). The final version of FEJA (signed in 2016) slashed funding needed to achieve the 25% target. That is why: 1) FEJA-inspired solar startups had to lay off 3,500 workers when funds dried up (Christian Roselund; Tim Sylvia); and 2) why electricity in 2020 was composed of only 9.7% renewables when the RPS target was 16.9% (Database of State Incentives for Renewables & Efficiency, June 2018). Since Illinois generated 173.3 million megawatt hours in 2020, that 7.2% RPS gap equals 12.4 million megawatt hours of renewables.

If we had met our annual RPS targets we might still face an electricity shortage. But there’s another issue. The delayed expansion of the RPS also crippled the growth of Illinois renewable energy companies, especially solar. We will now have to rebuild the solar labor force and scramble like crazy to cover both our electricity shortage and catch up with legally mandated RPS targets.

Exelon’s hamstringing of in-state renewable energy is part of the story. It is also blocking plans to import 2,000 megawatts of ultra-cheap wind power from the Great Prairie states. Stay tuned for that story next month.