BY STEVE DANIELS
Exelon isn't the only power generator trying to cope with low wholesale electricity prices by asking for financial help from its home state. But the company doesn't like it when peers ask for similar aid.
Chicago-based Exelon, which has said it will lobby Illinois lawmakers next year for legislation to boost revenues at its six nuclear plants in the state, has petitioned utility regulators in Ohio to block attempts by generators based in that state to prop up their plants courtesy of ratepayers there.
Exelon on Dec. 22 issued a strongly worded filing with the Ohio Public Utilities Commission in opposition to FirstEnergy's proposal to require electricity consumers at its Ohio utilities to pay extra for power generated by a 900-megawatt nuclear plant and 2,200-megawatt coal-fired plant owned by a separate FirstEnergy unit.
The proposal effectively would ask ratepayers, whether or not they are customers of Akron, Ohio-based FirstEnergy's utilities, to pay a surcharge on their electric bills to ensure the plants recover their costs and earn a specified return. In the event that wholesale power prices rise enough so that the plants are earning more than their allowed return, the utilities would credit customers' accounts for the difference.
So, what does that sound like? Regulation. The kind of regulation both Exelon and FirstEnergy successfully lobbied their states to do away with more than a decade ago. And Exelon doesn't like regulation of power plants, which theoretically are subject to the fluctuations of the energy markets.
In its testimony, Exelon sounds almost betrayed.
“The role (FirstEnergy) has played in the history of competitive markets in Ohio makes the elements of (its) proposal all the more concerning,” writes Lael Campbell, Exelon's director of state government and regulatory affairs. “(FirstEnergy) unfortunately proposes a monumental amendment, which if implemented, threatens the retail market in the (FirstEnergy) service territory and the state of Ohio as a whole.”
But how different, really, is FirstEnergy's approach from what Exelon suggests it will pursue in the Illinois Legislature early next year? Exelon has said repeatedly that the market isn't appropriately valuing the reliable, carbon-free power generated by its nukes, which supply nearly half the electricity consumed in Illinois. It hasn't yet unveiled its state proposal to boost revenues at its in-state plants, three of which the company says are losing money. But it's floated the idea of ratepayer-financed payments to its nukes along the lines of what wind farms and solar projects currently receive under state law to promote new sources of clean energy.
In a statement, the company says, “Unlike the proposal in Ohio, Exelon favors a competitive, market-based approach in Illinois. Illinois presently has clean energy programs that benefit all zero-carbon resources except for nuclear energy. We are seeking a level playing field that will allow all zero-emission resources to compete.”
Exelon hasn't been above seeking legislator-approved power-purchase contracts for its Illinois plants before despite its dedication to “market-based solutions.” In 2010, the company floated a bill that would have locked ComEd customers into paying power prices to Exelon's nukes at those levels for four years even as it was clear that prices—and electric bills—would fall otherwise. In return, the company offered the state $500 million to help with its acute budget crisis. The company withdrew the plan almost immediately after it created a firestorm.
NUKES OVER COAL
In Ohio, Exelon advocates that regulators prioritize saving FirstEnergy's Davis-Besse nuclear plant but not its far larger coal facility. Exelon, of course, is the largest nuclear power generator in the country. It has led a national campaign to preserve nuclear plants for their carbon-free production and round-the-clock reliability.
FirstEnergy's proposal, Exelon writes in its filing, “lumps nuclear in with aging coal units that do not possess the same societal benefits of nuclear generation, and by doing so, (the plan) does not provide value specifically for nuclear's unique combination of being both reliable and clean.”
FirstEnergy isn't the only power company seeking financial help in Ohio. Exelon has weighed in against the others as well, notably American Electric Power's similar plan to bail out four coal-fired plants.
In a separate July filing criticizing Columbus, Ohio-based AEP's plan, Exelon says, “AEP Ohio is proposing to swap its upside potential in (its) plants with the ratepayers, in exchange for a guarantee from the ratepayers of its cost plus return on its investment. Is that a good deal for customers?”
In Illinois, by contrast, Exelon clearly wants to preserve the “upside” for its plants here. The plan would be to boost revenues at the plants today via an inescapable charge for ratepayers, whether or not they buy power from a utility or an alternative supplier. There has been no discussion thus far from the company on actions to protect consumers from future energy price spikes, which would greatly benefit Exelon's plants.
The question Exelon asks in Ohio also can be asked here: Is that a good deal for customers?