Alec Messina

Executive Director Energy Council


217-522-5512 ext. 234
August 28, 2020
Good evening! I hope everyone is doing well. It's been quite a week, with a major announcement from the administration on energy policy and another Energy Working Group meeting, as well as plenty of other general developments detailed below. If you have any questions at all, please don't hesitate to reach out to me at amessina@ilchamber.org. On to the newsletter!  
 
Governor's Eight Energy Principles
 
On August 21, 2020, Governor Pritzker released a policy paper entitled Putting Consumers & Climate First: Governor Pritzker's Eight Principles for a Clean & Renewable Illinois Economy. The policy paper is included below. In the document, the Governor makes the case for energy policy reform, and spells out 57 different proposals - within his 8 prinicp0les - that he believes are necessary to transition to a clean energy economy, battle climate change, impose "real" accountability measures on utilities, and push the development and use of electric vehicles. Obviously, there is a lot to digest, but the cost to the Chambers' members from many of these programs is significant. On the other hand, several of the components included in the plan are items championed by the Chamber and/or its individual members. I will be in touch with you in the next week as we start to distill the 57 proposals into something we as an organization can dig into, and will work with you collaboratively to develop a Chamber response.
 
Governor's Energy Working Group
 
This week, the Administration resumed its Energy Working Group with a virtual meeting on Thursday, August 27, from 2:00 - 3:30. The meeting had over 90 participants. Deputy Governor Christian Mitchell noted that this meeting was essentially to reset the entire process, given the release of the Governor's key energy policy principles less than a week earlier, as well as the revelations from and fall out surrounding the deferred prosecution agreement involving ComEd. A copy of the agenda is attached to this newsletter.
 
The beginning of the meeting first allowed the administration to set some ground rules for moving forward, first noting that they were turning down requests for 1-on-1 meetings in favor of the more transparent working group process, and encouraged parties to submit written comments should they wish to address items in future agendas. Deputy Governor Mitchell noted that all of the policy discussions were going to be transparent, and all of the work was going to occur during these energy working group meetings. I think its fair to be a little skeptical of the refusal by the Governor's Office to have one-off discussions with certain stakeholders, as the agenda was sent out to invitees along with white papers prepared by the Clean Jobs Coalition (CJC) and the Environmental Law and Policy Center, covering utility accountability and guidelines on charitable contributions, respectively, but the point is still well taken that stakeholders should be prepared to submit their own positions to the administration for distribution to the full working group. Both white papers are also attached to this newsletter, but please note that the meeting ended before the charitable contribution white paper could be discussed. The Deputy Governor also noted that it was the administration's goal to have a legislative proposal ready by veto session, but didn't dismiss the possibility that talks might extend into the Spring legislative session.
 
As noted within the agenda, this meeting was intended to focus on utility company transparency and ethics, along with the twelve proposals contained with the first principle outlined in the Governor's Energy Principles statement. A representative of the CJC presented the highlights from its white paper, which is attached to the newsletter, and then stakeholders from numerous viewpoints spent the rest of the meeting discussing the benefits and concerns presented by formula rates. The first proposal under the Governor's first principle in his policy document urged the sunset of formula rates immediately, and this topic consumed the remainder of the meeting. While working group meetings generally don't allow for a thorough discussion of the critical issues, this meeting really was impressive in that - largely - stakeholders presented compelling reasons to extend the rate as well as compelling concerns.
 
While it would be unrealistic to expect that every one of the Governor's points would receive this level of discussion in future working group meetings, it certainly makes one wary when thinking about whether all of these issues can be addressed in a manner that will allow for all of them to be considered before the administration introduces a comprehensive energy proposal, if the administration sticks to its "soft deadline" of veto session.
 
Some of the key takeaways from the meetings included:
  •  The Administration believed Exelon's announcement earlier in the day that it could close two facilities amounted to bad faith (I am being extraordinarily diplomatic here), and that any discussion to subsidize nuclear plants would only come after Exelon consented to a truly independent audit of its books to determine financial need.
  •  Representatives of the CJC, ignoring the rebuke of the FRR within the Policy Principles disseminated by the administration a week earlier, spent a fair amount of time suggesting that CEJA aligned perfectly with the Governor's energy principles;
  •  Representatives of the CJC highlighted the need for additional staffing and other resources at the Illinois Commerce Commission in order to fully vet ratemaking proposals, more public input in the ratemaking process, and additional safeguards to ensure minority community outreach as a part of that process.
  •  CJC is working on a draft legislative language to amend CEJA, but they have nothing yet to share with the working group.
  •  There was a lengthy discussion of the complexity of an ICC ratemaking proposal, and the ability of the ICC staff to drill down into the minutiae.
  •  There was a brief discussion about whether formula rates were intended to be temporary in nature and focused on specific infrastructure needs.
  •  There was an interesting question asked by one of the legislators whether the sunset of the formula rates would lead to the loss of union jobs.
  •  Utility representatives suggested that reliability and infrastructure investment would not be unduly impacted by the sunset of formula rates, but only if they were replaced with something that ensured a path for timely and fair recovery.
As I noted above, the working group did not get through the agenda for this meeting, so it will be interesting to see how they adjust the process to start moving a bit quicker. The next meeting is scheduled for Tuesday, September 1, from 2:00 - 3:30, and stakeholders should get an agenda early next week.
 
Other Items of News and Note
 
Pritzker Energy Plan Comes with End to Automatic Rate Increases, New Ethics Overhaul
Dubbed a "hard reset" by Dep. Gov. Christina Mitchell, the Governor intends to propose a new energy plan on Friday, emphasizing transparency and ethics issues in the wake of the ComEd bribery scandal. The plan would draw from the Clean Energy Jobs Act, but would repeal the formula rates process, which ComEd secured in 2011. The plan aims for 750,000 more electric vehicles in Illinois by 2030, with a 100% clean energy goal by 2050. Coverage & More Info   
 
Trump Admin Approves Plan to Open ANWR for Oil Drilling
On Monday, Secretary David Bernhardt of the Department of the Interior announced the agency has approved a plan to auction off drilling leases in the Arctic National Wildlife Refuge in Alaska. A lack of geological data may hamper development projects, but the move drew praise from the American Petroleum Institute and Alaska Sen. Lisa Murkowski, among others. Various environmental groups have promised to challenge the DOI action on review grounds.
 
 
IL Bill Aims to Repurpose Closed Coal Plants for Renewables Storage.  
Illinois lawmakers met with Vista Energy in Canton, IL this week for a forum aimed to build support for the Illinois Coal to Storage & Energy Storage Act. According to the officials, the legislation would bring construction and operating jobs, as well as a boost to local tax bases, to areas dealing with the economic fallout of coal-fired power plant closures. Coverage.
  
ICC Approves NOI for Transportation Electrification Rage Design & Affordability  
The Illinois Commerce Commission initiated docket 20-NOI-03 on Wednesday, opening a Notice of Inquiry to explore electricity rate design options regarding adoption and deployment of electric vehicles, as well as the electric infrastructure to support them. The NOI poses questions to various stakeholders, with initial comments in the proceeding scheduled for November 16, 2020, and reply comments by December 18, 2020. Press Release & Docket 
 
Exelon Gen Plans to Close Dresden, Byron Nuke Plants in 2021  
Exelon Generation announced on Thursday that it plans to close two of its northern Illinois nuclear power plants: the Dresden Generating Station near Morris and the Byron Generating Station. In the announcement, Exelon president and CEO Christopher Crane gave condolences to the 1,500 full-time employees and 2,000 supplemental workers affected, stating "our hearts ache today for the thousands of talented women and men that have served Illinois families for more than a generation and will lose their jobs because of poorly conceived energy policies." The move was seen as an escalation in tensions between the electric utility and Illinois lawmakers, with Gov. Pritzker responding, "Exelon's threats will need to be backed up by a thorough and transparent review of their finances...." Coverage  
 
Pritzker's 8-Point Energy Plan Draws Mix of Praise, Criticism from Ameren  
Gov. Pritzker announced a new energy plan last week that included increased transparency and ethics requirements, affordability protections for consumers, electrification and renewable generation measures, among others. Ameren Illinois offered measured praise for the plan, noting that Illinois "has a real opportunity to produce more solar energy and get more electric vehicles on the road" and encouraging stronger ethics measures. However, the utility cautioned, "many of the proposed 'reforms' already exist in the current law" and emphasized the costs of generating clean energy. Coverage & Ameren Statement 
 
Senate Democrats Release Climate Plan for Net-Zero Carbon Economy by 2050 
On Tuesday, the Senate Democrats' Special Committee on the Climate Crisis issued 263-page plan with legislative proposals to bring the U.S. economy to net-zero for carbon output by the middle of this century. The report calls for a minimum of 2% of U.S. GDP in spending on climate investments, mandatory disclosures of climate risks by publicly-traded companies, and policies overhauling electric generation, transportation, and other sectors of the economy. Coverage & Plan 
 
Information:  
 
 
 
 
 
In Closing
 
As I noted above, the Governor's Energy Working Group has already scheduled its meeting for next week, and the Administration indicated it still hopes to have a legislative package ready for consideration during veto session. With all of this activity, these newsletters will be picking up in regularity. If you have questions, thoughts, or concerns about anything contained in this newsletter, or simply want to drill down into the energy working group or discuss the Chamber's role as we move forward, please don't hesitate to reach out to me. Until then, have a great weekend, and stay safe!
IL Chamber Energy Council | | amessina@ilchamber.org | 215 E Adams St.
Springfield, IL 62701

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