Energy giant Exelon is confident that an attempt to derail a law that could help subsidize two of its downstate nuclear power plants won’t hold up in federal court.
A group of the Chicago-based company’s competitors filed a lawsuit Tuesday against Illinois regulators, alleging the new state law that created the subsidies intrudes on federal authority to regulate wholesale energy prices.
"All the nuclear plants and all our member plants are selling in the wholesale market," said John E. Shelk, president and CEO of the Electric Power Supply Association, one of the plaintiffs in the case. "We compete against each other; we get the same price."
Gov. Bruce Rauner signed a bill in December that could allow Exelon subsidiary Commonwealth Edison to collect up to $235 million a year from customers to keep open financially struggling nuclear plants in Clinton and near the Quad Cities. The law was designed to cap rate increases at an average of 25 cents a month over 10 years for ComEd’s residential customers, but opponents said the hike could cost more than $4 a month.
Exelon said June 2, 2016, that it will move ahead with plans to shutter the Clinton and Quad Cities nuclear plants, blaming the lack of progress on Illinois energy legislation.
(Chicago Tribune)
Shelk said the law allows Exelon to get a side payment from customers for just two plants that otherwise would have failed.
Exelon has "very deep pockets," Shelk said. "Our members are on the other side. This is David vs. Goliath."
Another of the plaintiffs, Houston-based Dynegy, had been hoping for a subsidy in the law, called the Future Energy Jobs Act. It was cut as Exelon tried to win support from environmental groups. Dynegy has 12 power stations in Illinois, most of them fueled by coal, according to its website.
Exelon, which was not named as a defendant in the suit, disagrees with the allegations. The company has said the subsidies are warranted because nuclear plants — like subsidized wind and solar power — don’t emit carbon pollution that contributes to climate change.
The Federal Energy Regulatory Commission’s ability to regulate wholesale prices "does not relate to the clean-air attributes that are being recognized in this program," said Joe Dominguez, executive vice president of governmental and regulatory affairs and public policy for Exelon.
The company isn’t worried that the court could take issue with the subsidies, he said.
The suit, filed in U.S. District Court in Chicago, names Illinois Power Agency Director Anthony Star and a handful of Illinois Commerce Commission members as defendants. The power companies that brought the suit along with Electric Power Supply Association and Dynegy are Eastern Generation, NRG Energy and Calpine.
Star declined to comment. The Illinois Commerce Commission "is currently reviewing the allegations contained in the complaint and will respond appropriately in the proper forum," spokeswoman Marianne Manko said in an emailed statement.
The Illinois Clean Jobs Coalition, a group of environmental, business and faith organizations, put out a statement defending the new law, saying the lawsuit "will not stop Illinois from implementing the biggest clean energy breakthrough in its history."
"(The) lawsuit suggests that big polluting industries would rather shackle Illinoisans to higher costs and dangerous fuels of the past rather than invest in Illinois’ bright clean energy future," according to the statement.
The allegations in Tuesday’s lawsuit are similar to those in a suit filed in federal court in Manhattan in October seeking to reverse a subsidy for several struggling upstate New York nuclear plants.
As in Illinois, the energy companies and trade associations that brought the New York case argued that the subsidy violated federal authority to regulate energy prices. Exelon has controlling stakes in three of the nuclear plants involved in the New York subsidy and is acquiring the fourth.
That case, which shares some plaintiffs with the Illinois case, is still pending.
amarotti@chicagotribune.com
Twitter @AllyMarotti
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