Subsidizing Illinois nuclear plants will pay off for for some ratepayers this summer

[June 04, 2022]  By Zeta Cross | The Center Square

(The Center Square) – While some parts of the state are bracing for higher electricity costs, other parts of Illinois are likely getting a break.

In September, the Illinois General Assembly passed the Climate and Equitable Jobs Act, clean-energy legislation that included $694 million in ratepayer-funded subsidies to keep three of Illinois’ nuclear power plants up and running.

When electricity prices spiked this spring, the formerly money-losing nuclear plants suddenly became profitable, helping offset rate hikes for consumers.

Two of the nuclear plants – the Byron and Dresden plants – had been on the chopping block because they were racking up big losses. The nuclear power they produced could not compete with cheaper natural gas and subsidized renewables. ComEd's parent company, Exelon, was determined to close them.

Legislators voted to keep the plants operating in order to prevent the loss of several thousand jobs and to preserve the supply of available power. Zero emission nuclear power is critical to help Illinois meet its climate change benchmark of transitioning to 40% renewable power by 2030.

Currently, nuclear power supplies 90% of Illinois’ clean energy, Mason Emnett, vice president of public policy for Constellation Energy, told The Center Square.

“As part of the state’s transition and buildout of other clean energy technologies, we really see the whole clean energy ecosystem working together to achieve the state’s climate goals,” Emnett said.

The subsidy for the nuclear plants wound up being an investment in price stability, Emnett said.

Because the rising energy prices made Illinois’ nuclear plants more profitable, the power they provide turned into a hedge against high electricity prices, rather than the bailout that lawmakers had envisioned last fall.

Keeping the higher-cost nuclear power plants in operation is critical for the eventual transition to renewable energy, Emnett said.

“Leading scientists and environmental groups agree that achieving our climate goals really depends on preserving that nation’s nuclear fleet, while also investing in clean energy technologies, electrification and energy efficiency," Emnett said. "It really is an all-of-the-above strategy that we need in order to achieve our climate goals."

Starting in June, ComEd customers will see a credit of about $19.71 on their electric bills, Emnett said. The average customer will save $231 over the next year, the Illinois Commerce Commission said.

In other parts of the state, consumers are being told to expect higher prices in excess of $50 more a month.

During an Illinois House Public Utilities Committee hearing last month, Jim Blessing, vice president of regulatory policy and energy supply for Ameren Illinois, said the higher costs are associated with America’s changing attitudes toward fossil fuels.

“This is just a by-product of a national transition to clean energy that is going on today,” Blessing said.

Several industry stakeholders have warned part of the state could experience rolling blackouts because of energy reliability issues.