Decision by Two Trump Appointees Today Could Lead to Largest Increase Ever for 3.65 Million Illinois Electricity Customers
A federal ruling today will increase Illinois power bills by $864 million – believed to be the largest electricity increase in state history – unless the General Assembly takes immediate action to offset the controversial ruling by two federal regulators appointed by President Trump.
In a 2-1 ruling earlier today, two of the Trump-appointed members of the Federal Energy Regulatory Commission (FERC) adopted a policy that will force people in Illinois and other states to pay extra for electricity generated from coal and other dirty sources not needed to serve local demand for power.
To avoid Illinois electricity consumers paying more for unnecessary generation, the Illinois Clean Jobs Coalition urged state lawmakers to pass the Clean Energy Jobs Act (CEJA), sponsored by Rep. Ann Williams and Sen. Cristina Castro. The legislation would give the state more control of its energy future, avoid the $864 million in higher bills for customers and instead secure lower bills for them.
“The impact of this ruling on ComEd customers would be nothing short of devastating, but the General Assembly has the power to prevent it from happening,” said David Kolata, executive director of the Citizens Utility Board and Coalition member. “Illinois lawmakers must take action before their constituents are hit with jarring increases in power bills.”
A new analysis, “Consumer Impacts of FERC Interference with State Policies,” by Michael Goggin and Rob Gramlich of the consulting firm Grid Strategies, estimates that FERC’s decision could raise costs for consumers across the power grid by up to $5.7 billion a year. Northern Illinois would be one of the hardest hit areas: Electric customers here could pay up to $864 million a year extra.
The FERC decision comes amid an ongoing campaign by the Trump administration to prop up coal-fired power plants struggling to compete in the electricity market. Fossil fuel generators have been pushing for such a change for more than a year, as it becomes more difficult for their outdated plants to compete in the face of more modern technology, like solar and wind farms, and state policies that promote cleaner forms of energy.
Specifically, FERC’s ruling applies to PJM, an organization that manages the power grid and plans for long-term electricity needs—especially when demand is highest. The nation’s largest grid operator, PJM covers a vast territory that includes northern Illinois and all or parts of a dozen other states.
PJM assembles this long-term power supply – known as “capacity” – from electricity generators that participate in a competitive auction that it conducts. Illinois customers pay for these capacity costs through the supply charge on their electric bills.
The new rules approved by FERC will change auction rules in a way that rewards polluters that generate power from coal- and gas-fired plants, giving them the license to charge inflated prices and then foist the added costs on customers in northern Illinois and throughout PJM’s territory.
As a result of the FERC decision, electric customers across the Chicago region and most of northern Illinois are facing an imminent increase in the amount they pay to reserve enough power – known as the “capacity price” – to meet projected future demand for electricity. FERC’s action also undermines the state’s 2016 passage of the Future Energy Jobs Act that promotes clean energy goals and consumer savings through increased investments in energy efficiency and zero-carbon emissions sources, such as wind, solar, and nuclear power.
To shield electric customers from the higher bills, the Clean Energy Jobs Act would authorize the state to assume the responsibility for managing its capacity needs. Instead of Illinois relying on PJM’s capacity auction, a state agency, the Illinois Power Agency (IPA), would be put in charge of running Illinois’ own capacity auction.
The IPA already manages the power purchases of the state’s biggest electric utilities, and part of its mission is to protect consumers from unnecessary increases in their supply costs. The agency is better positioned to run Illinois’ capacity auction and ensure that northern Illinois consumers save money while the state’s clean energy goals are advanced.
Capacity market reform is one part of the Clean Energy Jobs Act, the most comprehensive and consumer-friendly energy bill in Springfield. The legislation also:
- Aims for a carbon-free power sector by 2030, and provides financial and other assistance to communities and workers impacted by coal plant retirements;
- Moves Illinois towards 100% renewable energy by 2050, attracting $39 billion in clean energy development;
- Develops transportation electrification to give Illinoisans access to cleaner and more affordable forms of transportation;
- Expands energy efficiency programs that have already cut utility bills by billions of dollars;
- Sparks business development, workforce training and jobs so all Illinois residents can benefit from the clean energy economy.
The Illinois Clean Jobs Coalition (ICJC) is a group of more than 200 organizations, businesses, and community leaders working together to advance clean energy jobs, lower energy bills, and healthier air and water. Visit ilcleanjobs.org to learn more.