US competitive energy provider Exelon and Illinois’ largest electric utility ComEd have announced the pending filing of the Next Generation Energy Plan, a controversial bill that seeks to spur the state’s clean energy incentives but scraps net metering and seeks to impose an unprecendented 'demand charge'.
The bill has been characterised by the company officials as fulfilling the goals of the solar industry, consumer groups and both of the authoring companies, but that has received a mixed response from industry groups.
The bill was borne out of discussions between Exelon, ComEd, the Clean Jobs Coalition and other stakeholders supporting energy legislation in Springfield in early 2015. A standout element of the bill is the push towards a Zero Emission Standard, which targets nuclear plants by requiring full and impartial reviews of plants’ costs by state regulators; plants will be entitled to receive compensation only if they are able to demonstrate revenues insufficient to cover costs and operating risks.
Other key elements include the near doubling of energy efficiency programs in northern Illinois, creating US$4.1 billion in energy savings. On the solar front, US$140 million is purportedly available in new funding for solar development, as well as a new rebate to incentivise solar in a savvier way than is encouraged by current policies.
In addition, the bill contains incentives to expand the Renewable Portfolio Standards (RPS) and to reduce the fixed customer charge for energy delivery by half, and enhance the reliability, resiliency and security of the national grid.
The new provisions highlight the intentions of Exelon and ComEd to address the issues faced by environmental stakeholders and consumer advocates. The group is working with the General Assembly to file a bill that could be passed before the end of this spring session. However, according to industry experts, legislators are unlikely to pass a bill during the session that ends this month; and also unlikely to pass any measure that does not have backing from all of the major players.
Whilst Exelon and ComEd are confident that the Next Generation Energy Plan does fit the bill, reception has been lukewarm.
Members of the Clean Jobs Coalition were hesitant in their feedback, mildly conceding that the bill is at least better than proposals previously put forward by the companies, and mentioning that ongoing discussions will be required before legislation is made that achieves the goals of the Clean Jobs bill.
Getting down to the nitty-gritty, some clean energy and environmental groups criticised the bill for failing to adequately inspire rooftop solar development, citing impediments that saddle customers with unfair costs to support Exelon nuclear plants. Furthermore, some feedback indicated that the bill did little to address the RPS.
ComEd vice president of energy acquisitions Scott Vogt was confident that the bill would amend Illinois’ ‘broken’ RPS, driving the procurement of more solar, with specific projects being determined at tenders.
“The funding is there and it’s to be spent on solar,” Vogt said. “If people bid too high [in their solar proposals at auction], the prices may not clear. But the intent is for that $140 million to be spent on solar every year, until the solar targets of the RPS are met, and then the dollars would roll over for other resources.”
In fact, the bill effectively calls for ending net metering as it currently exists, with a move to basing consumer charges more prominently on a ‘demand cost’ determined by single high spikes in energy use. ComEd has also has a policy preventing community solar net metering.
In an effort to negate that, however, the solar rebate on inverters needed to connect solar to the grid asserts that customers can get back US$1,000 per kW for residential and US$500 per kW for commercial and industrial installations. The language of the bill suggests that existing ComEd customers with solar panels could keep their current net metering agreement or opt for the rebate instead, with new customers receiving the rebate without net metering.
This measure has fallen particularly under fire, with the Illinois Solar Energy Association (ISEA) criticising the purported abolition of “stable solar policies” and bold unprecedented measures such as the demand charge.
The bill does however significantly increase ComEd’s commitments to energy efficiency, though Ameren Illinois, the utility serving downstate customers, is not included in those measures.
“We were not involved directly in the drafting. We do not support it as is. But it is significantly better than what they've introduced before and is really strong on efficiency,” said CUB executive director Dave Kolata in a statement, noting that EDF, the Sierra Club and the Natural Resources Defence Council have the same position.
“We still need to determine how we embark on this effort to remake the utility of the future, and how a forward-looking transmission policy will help us reduce barriers to the massive growth of solar and wind energy in Illinois,” added EDF director Dick Munson.
“There are less than four weeks to get this done in May, and EDF will be working closely with all parties to find a path forward.”
The main issue that opposing opinions are butting-heads on concerns how solar should be compensated, as some did concede that the bill would give the state more solar that it currently has.
“It appears that solar is great when the utility owns it, and can charge ratepayers for it, but we need a policy climate that allows for a wide variety of stakeholders to have the opportunity to develop solar,” said ISEA executive director Lindsey McCain.