By ROBERT CHANNICK
Proposed legislation expected to benefit three struggling Exelon nuclear plants would cost Illinois ratepayers an additional $1.6 billion on their electric bills through 2021.
That's the conclusion of a study released Tuesday breaking down the costs of the Exelon-backed bill, which is framed as supporting clean energy production. Critics call it a corporate bailout.
The cost to the average residential consumer will be about $2 per month, according to Exelon estimates. The city of Chicago would pay almost $14 million in additional charges, with municipalities, school districts and businesses across the state also paying more, the study said.
"This bill is nothing but a bailout for Exelon's allegedly failing nuclear plants," said Dave Lundy, director of the Better Energy Solutions for Tomorrow Coalition, a nonprofit organization of businesses and government groups that commissioned the study.
Chicago Public Schools would pay nearly $7 million more, while the Metropolitan Water Reclamation District would see another $8.3 million on its electricity bills over the 5-1/2 years the proposed measure would be in force, the study said.
The bill was introduced in February after a joint report by multiple state agencies examining the potential premature closing of nuclear plants in Illinois. Exelon says three of its six nuclear plants — Byron, the Quad Cities and Clinton — are struggling financially and are in danger of shutting down.
"These plants are losing money," said Paul Elsberg, Exelon spokesman. "They've been losing money for years. We believe that's because we have policies in place that don't recognize their low carbon attributes, and put them at a disadvantage to other forms of low-carbon electricity."
The measure is designed to provide subsidies to providers of low-carbon electricity beginning January 2016. Such providers could include, wind, solar, hydro and nuclear power generators. But critics say restrictions in the bill would ensure that only Exelon's nuclear plants would be the beneficiaries of the legislation.
Elsberg said the legislation is not a subsidy, but a "market-based solution" that allows "all assets to compete." If the three nuclear plants were to close, he said, it would eliminate nearly 8,000 "highly skilled" jobs and result in $500 million a year in higher energy costs statewide.
That sentiment was amplified in a new 30-second television commercial launched last week by Exelon to encourage passage of the bill. The spot maintains that Illinois' nuclear energy plants "keep the lights on" with no carbon emissions, but that some plants may close "because of outdated energy policies."
Kestler Energy Consulting, which conducted the study of the costs of the proposal, found that the low-carbon bill would increase average wholesale electricity supply costs by 8.45 percent for ComEd customers. Retail supply costs generally account for about two-thirds of the total customer invoice, according to Exelon.
Employing usage data from a 2012 Exelon-funded study in opposition to a proposed coal gasification power plant downstate, Kestler applied the potential impact of the low-carbon legislation on a number of governmental agencies and municipalities over the lifetime of the measure.
Electric bills would go up $3.3 million for Cook County, $6.8 million for the state of Illinois and $5.4 million for the CTA, the study showed.
"These are huge dollar figures at a time when every single entity of government is struggling just to balance its books now," Lundy said.
Chicago-based Exelon had a net income of $1.62 billion on revenue of $27.4 billion last year. That is down from a net income of $1.72 billion in 2013.
The company did not disclose the operating results from its individual power plants, but said competition from lower-priced natural gas, which has reduced power prices more broadly, has made its nuclear fleet less profitable.
"It's simply tone deaf for Exelon to be asking for Illinois ratepayers and taxpayers to bail out those of its nuclear plants that are not competitive in the economic market, while Exelon keeps the profits from those plants that are making money," said Howard Learner, executive director of the Environmental Law and Policy Center.
The Exelon-backed legislation is out in front of the Environmental Protection Agency's forthcoming Clean Power Plan, which will set state-specific goals for carbon dioxide emissions from the power sector to address greenhouse gas emissions.
Exelon spokesman Elsberg said nuclear energy produces 90 percent of the low-carbon electricity in Illinois.
"If you believe that climate change is real and is a threat, and that we ought to be working to reduce our carbon emissions, there's no clearer way that we know of yet, technologically, to do that, without nuclear energy," Elsberg said.
Meanwhile, the legislation's opponents say its disingenuous to paint the technology as green in a bid to generate environmental subsidies.
"Nuclear power has the advantage of not producing greenhouse gases, that's good," Learner said. "On the other hand it produces huge amounts of radioactive waste. So the attempt to somehow treat nuclear power as equivalent in greenness to energy efficiency, solar power and wind power, is simply wrong."
The Better Energy Solutions for Tomorrow coalition is partnering with AARP and other organizations to oppose the Exelon-backed legislation. The group is skeptical that any nuclear plants will be closing in Illinois in the near future, even without a bailout.
In arguing for the legislation, Exelon spokesman Elsberg seemed to augur that closing some or all of the nuclear plants may be inevitable.
"It would defy common sense to continue running power plants that are losing money every year," Elsberg said. "It's not much different than if you run a chain of drugstores. You don't subsidize some stores that are losing money with the profits of others. You close them."