Proponents drop push to give downstate utilities dibs on new transmission lines

[October 26, 2023]  By ANDREW ADAMS
Capitol News Illinois
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With billions of dollars of construction projects on the line, Ameren Illinois and the International Brotherhood of Electrical Workers have been vying to secure first rights on new electricity transmission line construction in downstate Illinois.

But after Gov. JB Pritzker issued an amendatory veto to a bill that would have granted downstate utilities the right of first refusal for such projects, those advocates are abandoning their efforts – for now.

At a news conference Wednesday, Rep. Larry Walsh Jr., D-Elwood – the chair of the House Public Utilities Committee and sponsor of the vetoed bill – conceded the fight over House Bill 3445.

“We’re not going to carry or try to override the veto,” Walsh told reporters.

Walsh and advocates for the policy faced an uphill battle. The bill passed 41-9 in the Senate and 63-32 in the House. That’s fewer than the 71 votes needed in the House to buck the governor’s veto.

And in the months since it passed in May, several advocacy groups have come out against the policy, citing potential consumer and environmental implications. These groups include environmental groups like the Sierra Club of Illinois and Illinois Climate Jobs Coalition, as well as the conservative group Americans for Prosperity.

These concerns were echoed by Pritzker, who wrote in his veto message that the provision would “eliminate competition and raise costs for rate payers.”

But Walsh said he’s not giving up his push to grant utilities a right of first refusal. Come spring, he said he hopes to persuade ratepayers, lawmakers and the public about what he sees as the benefits of such a policy.

“We’re looking at doing a full education swing in the spring; introduce a bill that puts [JN1] the state of Illinois as a right of first refusal state – for the whole state with no sunset,” Walsh said.

This is a major shift away from the original proposal, which Walsh said was intended to study how to effectively implement a right of first refusal policy. That provision was limited only to the grid operator for downstate Illinois – the Midcontinent Independent Systems Operator – and contained a sunset for the end of 2024.

Rep. Larry Walsh Jr., D-Elwood, speaks to reporters alongside representatives of the International Brotherhood of Electrical Workers, Ameren Illinois and other proponents of giving utilities the right of first refusal for new electricity transmission line construction. (Capitol News Illinois photo by Andrew Adams)

Representatives of Ameren Illinois, which would have gained a lucrative first crack at constructing new transmission lines, said they were concerned about other companies underbidding in order to be selected for a project, then running over cost and behind schedule.

“Once these projects are put out for bid and a company wins that, they may, in fact, then gain a monopoly with limited state oversight and the competitive benefits never materialize for consumers,” Matthew Tomc, Ameren’s vice president of regulatory affairs, said Wednesday.

On Tuesday, Ameren’s president sent an appeal to lawmakers to override the veto.

Beyond the controversy surrounding the right of first refusal, transmission line construction has become a front line in the fight over climate change in recent years, particularly regarding who will profit from and regulate new construction.

This is because as new energy sources like solar or wind farms come online, they need new lines to deliver their power to the grid.

The International Energy Agency, an intergovernmental advisory group based in Paris, released a report this month that found the world will need to build or replace around 50 million miles of grid by 2040 to meet clean energy goals, which is roughly equivalent to replacing the entire current global grid. That report also found grids are becoming a “bottleneck” in the transition to zero-emission electricity systems.

In Illinois and its region, this means that billions of dollars of construction are on the line. MISO estimated its current round of transmission line projects, which is the second of four upcoming, would cost $20 to $30 billion.

Pritzker, in his veto message, noted that there are $3.6 billion of planned transmission projects in the Ameren service territory.

Capitol News Illinois is a nonprofit, nonpartisan news service covering state government. It is distributed to hundreds of print and broadcast outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation, along with major contributions from the Illinois Broadcasters Foundation and Southern Illinois Editorial Association.