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The elections are behind us. Let’s now focus on opportunities to advance clean water, clean transportation and clean-energy solutions that can help make Duluth an even stronger, more sustainable community.
The Environmental Law and Policy Center has opened a new office here, staffed by Duluth native Jessica Dexter. We will be working with civic partners to make a difference in advancing positive environmental solutions in three areas of focus.
First, Duluth is at the headwaters of the Great Lakes and not far from the Mississippi River’s headwaters. America’s greatest freshwater systems both start in this region. For many years, the Environmental Law and Policy Center has been working collaboratively with environmental and policymaker partners to clean up the Great Lakes and reduce pollution in the Mississippi River basin.
The Great Lakes are global gems, representing 22 percent of the world’s freshwater supply and providing drinking water to 42 million people in eight states and two provinces. The Environmental Law and Policy Center played a key role in advancing the transformative Great Lakes Restoration Initiative, which, since 2011, has provided more than $1.3 billion in federal support to more than 2,000 projects that have improved water quality, protected and restored native habitat and species, prevented and controlled invasive species, and are helping solve additional Great Lakes environmental problems.
The Environmental Law and Policy Center’s public-interest attorneys are focusing on reducing mercury and other toxic contamination that impair the Great Lakes’ ecological health and safe drinking-water supplies. We look forward to working with Minnesota partners to advance sound, science-based legal and policy solutions to better protect Lake Superior and the other Great Lakes.
The mighty Mississippi River flows past Minnesota and nine other states before emptying into the Gulf of Mexico. Along the way, it provides drinking water for more than 18 million people and vital cultural, recreational, economic and wildlife resources. Reducing phosphorus and nutrient pollution from fertilizer and manure runoff from agricultural operations into the waterways of the Upper Mississippi River basin is necessary to protect threatened local drinking water and to counteract the growing Gulf of Mexico “dead zone” caused by pollution.
Second, better transportation is vital for Duluth’s economic and environmental health. The Minnesota Legislature will consider a transportation bill this session. It should prioritize smart investments in transit and rail, which are gaining passengers, and “fix it first” when it comes to highways and bridges. According to the St. Louis County Public Works Department, 20 percent of the bridges in the county longer than 10 feet are “deficient.” Fixing problem bridges should be a priority.
Let’s also support better inter-city rail transportation options that advance Duluth’s future. Modern, faster, comfortable and convenient passenger rail service between Duluth and the Twin Cities will improve mobility, reduce pollution, create jobs and better connect the regional economy.
A “hard-wired” rail link would make Duluth less dependent on airlines’ changing plans and business priorities and would connect Duluth to the Twin Cities metropolitan area and beyond. In addition, new passenger rail service creates a competitive price constraint on airfares and helps attract businesses and mobile young professionals to Duluth.
The Environmental Law and Policy Center long has been a recognized leader in advancing the Midwest high-speed rail network. We look forward to working with Duluth-area businesses, environmental leaders and transportation experts to accelerate modern Duluth’s higher-speed rail from vision to reality.
Third, the Environmental Law and Policy Center is advancing breakthrough policies that accelerate solar-energy development and remove regulatory barriers. The center’s public-interest attorneys and experts were extensively engaged in persuading the Minnesota Public Utilities Commission to adopt a forward-looking “value of solar tariff” that takes into account the multiple benefits of solar-energy development.
Solar energy should be compensated in ways that value the jobs and economic development from new projects, the pollution reduction and public health benefits, and the importance of solar as a peak-power resource that’s generally available when the power is needed most for demand and reliability. Let’s work together to advance Minnesota leadership on innovative clean-energy policies and projects.
The Environmental Law and Policy Center believes environmental progress and economic growth can be achieved together. We put this sustainability principle into practice with the positive initiatives described above. We look forward to working with our Duluth partners to advance clean-water, clean-transportation and clean-energy solutions that work well and support Duluth’s sustainability.
Howard Learner is executive director in Chicago of the Environmental Law & Policy Center, an environmental and economic development advocacy organization that recently opened an office in Duluth. The center has offices in five Midwestern cities.
While Exelon prepares to ask state legislators to rescue its Illinois nuclear plants, new rules set by an obscure power-grid organization back East would send more than a half-billion dollars to those sites by significantly raising electric bills.
The changes raise questions about whether state action is even necessary.
PJM Interconnection, the Valley Forge, Pa.-based regional power-grid operator for all or parts of 13 states including northern Illinois, on Dec. 3 approved changes to the way electricity generators are compensated for their promise to deliver during peak-demand periods. The changes, which are subject to approval by the Federal Energy Regulatory Commission, will benefit Chicago-based Exelon more than any other power company in the 13-state region, analysts say.
When they take effect in 2018, those alterations will funnel more than $560 million in additional revenue that year to five of Exelon’s six Illinois nuclear stations, according to an analysis by former Illinois Power Agency Director Mark Pruitt. (One, the downstate Clinton plant, isn’t in the PJM region and wouldn’t benefit from the special payments.) Spread across all six of Exelon’s plants, that revenue would add roughly 22 percent to the net revenue they collected as a group in 2013.
Compared with what Commonwealth Edison customers pay today, the changes would hike the price of electricity 19 percent. Customers’ total rates would increase by 11 percent, although that number is expected to rise with increases in the separate cost of delivering the juice.
Pruitt’s analysis doesn’t account for any changes in underlying wholesale power prices. But Exelon has projected that they will rise modestly over that period, which would hike rates further.
Exelon complains that market distortions have reduced wholesale power prices fetched by its nukes and has threatened to close as many as three of its six Illinois plants without a boost in revenue. It plans to lobby state lawmakers next year for financial assistance in the form of higher electricity rates, although it has yet to make a formal proposal.
But critics ask why the state should force households and businesses to pay Exelon more when the company appears to be in line for a major increase in revenue—courtesy of PJM—in three years.
“Why should the Illinois Legislature create another windfall for Exelon at the expense of Illinois ratepayers?” says Howard Learner, executive director of the Chicago-based Environmental Law and Policy Center, which is often at odds with Exelon. “There’s no good reason for that.”
The fees for peak-demand power delivery, also known as “capacity” charges, are set three years in advance and are paid to operators on top of what they get for the juice they produce. As wholesale power prices have declined—largely due to the low cost of natural gas—capacity payments have become a more important component of power generators’ revenue streams.
PJM has grown increasingly concerned about grid reliability during high-demand periods. PJM officials cite last winter’s polar vortex in particular when 22 percent of the resources “on call” were unavailable when demand spiked. Parts of the region came uncomfortably close to forced outages.
What’s the matter with Wisconsin?
That’s what many clean energy proponents are asking, in the wake of the Wisconsin Public Service Commission (PSC)’s decisions in favor of rate restructuring that could virtually kill solar and other types of distributed generation across much of the state.
Despite significant public opposition, the PSC in November decided to approve rate cases filed by utilities We Energies, Madison Gas & Electric (MGE) and the Wisconsin Public Service Corporation, which could drastically reduce the feasibility of installing solar or other types of renewable energy for consumers in the Milwaukee, Madison and Green Bay areas.
The approvals are not final until written decisions are issued; PSC spokesman Nathan Conrad said that will likely happen in mid-December.
Similar rate restructuring proposals have been made by utilities around the country. But public service commissions have overwhelmingly not supported them, either turning down the requests or delaying a decision while demanding more study.
For Immediate Release
Contact: David Jakubiak
ELPC Files Comments on U.S. EPA’s Clean Power Plan:
America’s Energy Future Lies in Efficiency, Wind and Solar;
Midwest Poised to be a Global Climate Leader
CHICAGO – America’s Midwest is positioned to lead in delivering climate change solutions powered by wind and solar energy and maximizing energy efficiency, the Environmental Law & Policy Center (ELPC) said in comments filed today with the U.S. Environmental Protection Agency.
Monday marked the deadline for comments on the EPA’s landmark Clean Power Plan which is designed to reduce the carbon pollution from existing power plants by more than 30 percent by 2030.
“Six Midwest states account for 5 percent of global carbon pollution. We should lead with positive clean energy solutions to climate change problems here in America’s Heartland,” said Howard Learner, Executive Director at ELPC. “Those solutions are already being developed with wind and solar energy and with the rapid advancement of energy efficiency.”
Even greater carbon reductions can be achieved with state policies that foster the development of renewable energy and energy efficiency. For this reason, ELPC requests that U.S. EPA set stronger renewable energy targets based on growth in the last 5-6 years and stronger energy efficiency targets that are verifiable and transparent.
Addressing climate change is a priority in the Midwest because of the threat the changing climate poses to the region’s agriculture, its aging transportation and storm water infrastructure, and public health.
Wind power and solar energy are clean energy, but nuclear power generation that creates highly radioactive waste is not. ELPC requests eliminating “preserved nuclear capacity,” and asks that if this compliance option is upheld, then “EPA should require a very high showing by states that any ‘preserved’ nuclear power is both truly ‘at risk’ of early retirement, and, in fact, will be predominantly replaced by fossil-fuel generation.”
Learner said: “In this new century, we’ll power our economy with clean, renewable energy and energy efficiency that will create jobs, spur economic growth, and cut carbon pollution to address our climate change problems.”
Dear Friends and Supporters,
ELPC has achieved strong successes in challenging times, demonstrating that smart, strategic legal and policy advocacy can both improve environmental quality and grow the Midwest’s economy. ELPC’s solutions-focused strategies engage diverse partners and seize opportunities to make a fundamental difference in accelerating clean energy development and clean transportation technologies, protecting clean air and clean water, and preserving the Midwest’s special wild and natural places. Our multidisciplinary staff teams of expert public interest attorneys, M.B.A.s, policy advocates and communications specialists, combined with sound science engagement from ELPC’s Science Advisory Council, play to win and know how to get things done—truly making a difference for a better world.
We’re on the cusp of fundamental environmental changes. New solar energy, wind power, battery and lighting technologies can help clean up and transform the electricity sector. The Obama Administration’s landmark Clean Power Plan will, in effect, impose a price on carbon pollution while allowing flexible pollution reduction strategies that can be sculpted for effective solutions in each state.
ELPC’s advocacy led to the nation’s largest-ever investment in high-speed rail, including $2.6 billion for developing the Midwest rail network. Modern, faster, more comfortable new trains are being manufactured in the Midwest, creating jobs and spurring economic growth. The Midwest is a proving ground for the rest of the nation: higher-speed rail is arriving, with ELPC’s leadership.
Innovative car technologies – all-electric vehicles, gas-electric hybrids, fuel cell, CNG and others – combined with better designs and lighter materials are reducing
pollution from the transportation sector while lifestyle and economic changes lead to fewer people driving
cars and fewer vehicle miles traveled.
President Obama’s Great Lakes Restoration Initiative has bipartisan support and sustained appropriations, which have largely avoided political squabbling. The projects supported by $1.3 billion of federal funds over the past four years are achieving real results for restoring the Great Lakes ecological system.
This is an exciting and challenging time for ELPC’s Board and Staff to seize these opportunities for environmental quality and economic development progress. We’re proud of ELPC’s accomplishments in helping transform our Midwest home into a cleaner and more vibrant place to live, work and play.
Howard A. Learner and David Wilhelm
ELPC Executive Director and Board Chair
ELPC’s strategic litigation and advocacy campaigns provide our Midwestern conservation colleagues with first-rate legal firepower when necessary to protect treasured natural resources. ELPC public interest attorneys work in both the federal and state courts, and in the court of public opinion, to protect the Great Lakes, Mississippi River and the Midwest’s special natural areas, threatened species and wildlife habitats. ELPC establishes key legal precedents that protect our natural heritage now and for the future.
Protecting the Midewin National Tallgrass Prairie – Challenging the Proposed Illiana Tollway. Midewin is our country’s first national tallgrass prairie and is home to northeastern Illinois’ largest, most diverse community of grassland birds. ELPC and our clients Openlands, Midewin Heritage Association and Sierra Club are challenging the boondoggle Illiana Tollway, which threatens the Midewin Prairie and wildlife habitat with damaging noise, light and pollution from convoys of heavy trucks. ELPC’s federal and state court litigation, combined with our media and public education campaign, has exposed the financial folly of the Illiana Tollway and its destructive impacts on the Midewin National Tallgrass Prairie. In October, the Chicago Metropolitan Agency for Planning Board again voted overwhelmingly against adding the Illiana Tollway to the regional plan. The Illiana Tollway is now the hottest transportation battle in Illinois.
Defending the Sylvania National Wilderness Area. Sylvania is a beautiful 18,327-acre wilderness area with quiet connected lakes and old-growth trees on the Wisconsin-Michigan border. ELPC attorneys, representing Friends of Sylvania, Sylvania Wilderness Cabins, and the Upper Peninsula Environmental Coalition won a major victory in federal district court to finally limit “grandfathered” polluting and noisy gas-powered motorboat use along the Sylvania Wilderness. This ELPC litigation victory is a key precedent for protecting our Wilderness Areas, National Forests, and National Lakeshores in the North Woods and Upper Great Lakes. We’re protecting the Sylvania Wilderness against invasive species and preserving wilderness tranquility for people to enjoy in this special place.
Stopping the SS Badger from Dumping Toxic Coal Ash in Lake Michigan. ELPC and our colleagues are working with U.S. Senator Dick Durbin and others to stop the coal-burning SS Badger, a Lake-Michigan ferry boat, from dumping about 1 million pounds of toxic coal ash into Lake Michigan each year. In 2013, the SS Badger’s owner agreed with the US EPA to reduce coal ash dumping in 2014 and completely stop by 2015. The SS Badger’s owner now claims to have installed digital combustion controls that lower fuel consumption, and, next summer, will store the coal ash on board. ELPC will work to ensure that the SS Badger stops dumping into the Great Lakes.
Protecting the Great Lakes from Aging Oil Pipelines. Every day, Enbridge’s decaying, 60-year-old “Line 5” pipeline carries over 20 million gallons of crude oil and natural gas fluid under the Straits of Mackinac, which connects Lake Michigan and Lake Huron. In 2010, another Enbridge pipeline spilled more than 875,000 gallons of oil into the Kalamazoo River. That spill created an ecological disaster that is still being cleaned up today. ELPC is working with the Michigan Land Use Institute, Michigan Environmental Council, FLOW and other partners to require Enbridge to remove, replace or upgrade its pipeline to protect the vulnerable Straits of Mackinac. We are gaining support from policymakers to take needed protective action.
Disruptive solar energy and battery technologies and sustained advances in energy efficiency are poised to transform the electricity sector like wireless and the internet transformed telecommunications. ELPC advocates new policies to drive energy markets and technological innovations that can change the world.
Growing Renewable Energy in the Heartland. Wind power development is driving manufacturing jobs, rural economic development and pollution reduction. Iowa leads the nation, generating 28% of its electricity from wind power. Chicago has 14 global and North American wind power corporate headquarters. Wind power equipment supply chain businesses create jobs across the Midwest. Solar technologies keep advancing and PV panels drop in price, while energy efficiency advances in appliances, lighting and buildings save us money and reduce pollution.
ELPC’s solutions-based advocacy accelerates clean energy through an “innovate and replicate” model in which new policies — including updating standards for more solar on the grid in Illinois and new solar approaches in Minnesota — can be replicated in more states to drive markets, reduce barriers, and advance clean energy across the Midwest.
Expanding Energy Efficiency Programs. LED lights save 90% more energy than incandescent bulbs. In Illinois, ELPC steered new programs to accelerate market penetration of LED lights and home weatherization to produce longer-term, deeper energy savings. In Iowa, ELPC persuaded a utility to increase discounted LED lights from 2% to more than 40% by 2018, thereby avoiding more than 45 million pounds of CO2 pollution. ELPC’s sustained advocacy to accelerate energy efficiency in the Midwest will save consumers money on their utility bills, reduce the need for polluting power plants, and lighten the load on the electricity grid thereby improving reliability. A key indicator of market change: American Electric Power told the Public Utilities Commission of Ohio that it expects electricity demand to decrease by 16% over the next ten years.
Solar is Poised for Breakthrough Success. ELPC’s advocacy leadership is advancing breakthrough policies and removing barriers to solar energy development. ELPC persuaded the Minnesota Public Utilities Commission to adopt an innovative “value of solar tariff” to recognize the multiple economic and social benefits of solar. ELPC is working with Illinois policymakers to update standards that will make solar easier to finance and connect to the grid. ELPC attorneys won a nationally precedential case before the Iowa Supreme Court to remove utility-sponsored regulatory barriers against a conventional financing mechanism used to support solar installations on public buildings, homes and business.
ELPC attorneys and a diverse coalition of solar power and energy efficiency businesses, RENEW, AARP, low-income consumer groups, and municipalities are fighting back before the Public Service Commission of Wisconsin against three Wisconsin utilities seeking to raise fixed charges and impose costly regulatory barriers to advancing solar energy and energy efficiency innovations. We need to win before the Comission and in the court of public opinion.
ELPC designed Illinois’ new $30 million solar procurement program, and we are working to create more sustainable cities by developing old industrial brownfields into solar “brightfields” that generate clean energy, create jobs and spur economic revitalization. ELPC’s multidisciplinary team of energy experts works on multiple fronts to accelerate Midwest leadership to a cleaner energy future.
The Midwest is the center of our nation’s carbon pollution problems and should be the fulcrum for clean energy and clean transportation solutions. ELPC is working to speed development of clean wind power and solar energy resources, implement policies to advance energy efficiency, and accelerate hybrids, electric vehicles and other modern clean car technologies combined with better planning. These climate change solutions are good for job creation, good for economic growth and good for our environment and public health.
Achieving the Full Potential of the Clean Power Plan. President Obama’s proposed Clean Power Plan advances climate solutions leadership. The U.S. EPA is finalizing strong federal carbon pollution reduction standards in 2015 that will use Midwest states’ implementation plans to clean up the Midwest’s electricity sector. Supportive policies, improved technologies and changes in business and public attitudes and actions are driving clean energy from early adopters to the mainstream, with more wind power development, more solar energy installations and more efficient LED lighting, appliances, HVAC, pumps and motors. Electricity demand is declining while the Midwest economy is rebounding, and renewables and natural gas are squeezing out old coal plants and reducing carbon pollution. ELPC’s framework strategy Repowering the Midwest is moving from policy vision to reality.
Advancing Midwest High-Speed Rail Development. ELPC’s sustained advocacy to advance the Chicago-hubbed Midwest high-speed rail network is achieving major progress with bipartisan political and business, labor and civic support. By late 2015, we expect 110 mph modern rail service on 75% – 80% of the Chicago–St. Louis corridor, and soon after on the Chicago-Detroit corridor. Modern passenger railcars manufactured in Rochelle, Illinois are on track by early 2016. Minnesota continues planning for high speed rail projects as well. Key federal transportation legislation is a priority for Congress in 2015, and ELPC is working closely with the pivotal Midwest delegation to expand funding for high-speed rail development that improves mobility, reduces pollution, creates jobs and spurs economic growth.
Reducing Harmful Diesel Pollution. ELPC and our community partners challenged increased diesel pollution from Norfolk Southern’s rail yard expansion in Chicago’s Englewood community. ELPC’s legal and policy advocacy combined with community organizing, public engagement and media attention brought Norfolk Southern to the negotiating table. The settlement will reduce particulate pollution from diesel rail equipment and trucks, add neighborhood green space, and bring new jobs and economic growth.
Promoting Electric Vehicles. ELPC business and policy specialists are working to expand electric vehicle market penetration by removing barriers and advancing supportive policies. ELPC is partnering with the City of Chicago and leading businesses to promote workplace charging policies and infrastructure. By developing the policies to create workplace and home charging opportunities, electric vehicles can be used by more people, expanding capacity for businesses to operate large-scale green fleets.
Plain and simple: Republicans achieved a wave of victories nationally and in the Midwest while, as the incumbent national party, Democrats bore the brunt of the public’s dissatisfaction with politicians. The public, however, did vote positively on various referenda issues in ways that aligned more closely to Democrat positions than Republican positions.
For environmental, clean energy and conservation advocates, the election results are mostly not promising, but it’s more complex than simple one-liners aimed at raising money or gearing up for 2016 battles. We lost some strong environmental supporters in the November 4th elections, but some winning candidates, from both parties, have been good supporters of clean energy, passenger rail, and other environmental and conservation programs. As described below, there are some opportunities as well as obvious challenges.
Three trends worked against the incumbent party in 2014 – the first two of which will change in the 2016 elections: (1) Democrats defended an unusually larger number of Senate seats in 2014 than Republicans did. (2) Republicans were able to take advantage of the historic trend of voters electing candidates of the party opposing a sitting President in off-year elections. This is especially the case at the six-year mark in a President’s tenure. Voters are usually ready for change, and frustrations over domestic or foreign policy issues are often taken out on the President and his party. The 2014 voting results are mostly consistent with so-called “pendulum swings.” (3) Older voters continue to participate much more than younger ones, but among senior citizens, Roosevelt Democrats are dying off and being replaced by Reagan Republicans.
As the incumbent party, Democrats bore the brunt of this rampant dissatisfaction. Senator-elect Joni Ernst (R-Iowa) and Governor-elect Bruce Rauner (R-IL), for example, proudly ran on platforms of changing “business as usual” and successfully tapped this wave of public dissatisfaction in a way that parallels President Obama’s successful “change” message in his 2008 election campaign. Opportunity: Environmentalists should build on this “business as usual” concern in our challenges to the Illinois Department of Transportation’s proposed Illiana Tollway, which is a financial boondoggle “road to nowhere” that will harm the Midewin National Tallgrass Prairie. Likewise, Exelon’s, First Energy’s, AEP’s and other energy companies’ attempts to gain more public subsidies and taxpayer bailouts for their uneconomic nuclear and coal plants exemplify a distasteful “business as usual” to much of the public.
In the Midwest, we’ll have to thread the political needle, but there are some focused opportunities for progress. Midwest high-speed rail development enjoys bipartisan support in Illinois, Michigan, Minnesota and Missouri. We expect Governor Rick Snyder (R-MI) to work together with Governor-elect Bruce Rauner (R-IL) on Chicago-Detroit high-speed rail, as he has with outgoing Governor Pat Quinn (D-IL).
Governors Terry Branstad (R-IA), Jack Dalrymple (R-ND), Mark Dayton (D-MN) and Dennis Daugaard (R-SD) are strong supporters of wind power development, as are most members of the Midwest/Great Plains Senate Delegation, including Senators Dick Durbin (D-IL), Al Franken (D-MN), Charles Grassley (R-IA), Amy Klobuchar (D-MN) and John Thune (R-SD). A challenge: Can we effectively parlay that wind power support into solar energy policy support as the next clean technology opportunity? ELPC will soon be issuing updated renewable energy business supply chain reports, which identify specific companies in each state by legislative district, to underscore the economic value in their communities.
Energy efficiency – Because it saves money for residential and business consumers, it receives at least lip-service bipartisan support; it’s “motherhood and apple pie” in political terms. There seem to be serious opportunities for progress in Illinois and Michigan, although recent setbacks in Indiana and Ohio are disheartening.
Severe fiscal constraints in Illinois and some other states will help ELPC and other partners challenge boondoggles such as the proposed Illiana Tollway, which is opposed by environmental and conservation interests and widely seen as a billion-dollar boondoggle. Environmentalists should consider mounting “green scissors” campaigns, which identify wasteful projects and programs, in the Midwest states that are facing serious budget shortfalls.
There’s no way to sugar-coat it: although environmental values historically transcended party lines, many key Republican Congressional leaders actively and ardently oppose environmental programs and climate change solutions in particular. With the U.S. Senate now controlled by Republicans, environmentalists will be on the defensive. Climate change denier Senator James Inhofe (R-OK) will chair the Environment and Public Works Committee, oil-industry friendly Senator Lisa Murkowski (R-AK) will chair the Senate Energy and Commerce Committee, and Senator Mitch McConnell (R-KY) will become the Senate Majority Leader. Our environmental protection and natural resources preservation values will be under assault in multiple ways. Challenges: (a) Assess when and where to compromise, and where to draw lines in the sand. (b) Build some bipartisan support in the Senate to hold off 60-vote majorities on climate change solutions backsliding and to enable the U.S. EPA Clean Power Plan to move forward. (c) Engage support for President Obama to wield his veto pen when necessary for defending core environmental values and clean energy solutions to our climate change problems.
Too many Democrats ran away from environmental and clean energy issues, and some preliminary data indicates fall-off in voting in some states, especially among younger voters who care about these issues. For example, in Chicago, 2014 turnout was significantly below 2010 voting, and younger voters really did not turnout. That low turnout follows a coordinated campaign by Democrats to identify their hoped-for voters and get them to vote. ELPC plans to work with an analytics team to assess turnout of pro-environmental (especially younger) voters in several key cities and states. That analysis could provide important data in persuading elected officials to talk and act more favorably on pro-environmental and pro-clean energy issues if they want to turnout more voters. If candidates and the national parties want to increase turnout of pro-environmental votes – particularly younger voters – they need to speak to climate change solutions and take actions that “walk the talk.” More news to follow on this point.
Senator Mark Kirk (R-IL) has been a strong supporter of Great Lakes protection and was one of the few House Republicans to vote for the Waxman-Markey climate change solutions legislation. We should urge Senator Kirk to exert leadership on key issues within the Republican Senate caucus. This opportunity is even more important given the close working relationship between Senator Kirk’s staff and Governor-elect Rauner’s staff. It is important to recognize that not all new Republicans entering the Congress are anti-environment. Midwestern environmentalists should be able to work with some new members, including Congressman-elect Robert Dold (R-IL), whose pro-environmental and pro-clean energy campaign ads and positions reflect his Chicago-Northern Suburban district. South Dakota Senator-elect Mike Rounds (R-SD) may be an opponent on many issues, but he also supports extending the federal Production Tax Credit (PTC) for wind power development. Across a broad range of issues, environmentalists should consider reframing some of their positions into language more consistent with Republican approaches and philosophy. We could see more increased interest, for example, in market-based solutions.
All of the Midwest and Great Plains states elected Republican Governors, with Minnesota as the lone exception. Several Republican Governors (e.g., Kasich, Pence, Walker) apparently look in the mirror and see themselves as possible Presidential and Vice-Presidential contenders. Let’s be realistic: their visions do not include supporting the U.S. EPA’s Clean Power Plan, and, at least until after the November 2016 elections, they will not likely support a “Midwest RGGI” (Regional Greenhouse Gas Initiative) for political reasons regardless of asserted policy and economic rationales. Indeed, they are much more likely to be joining Congressional Republicans in bashing and suing to stop the U.S. EPA from implementing the Clean Power Plan than in joining together in a regional RGGI-type compact. We should focus on actively engaging in each Midwest state to develop and shape their clean power compliance strategies and plans. We should leave doors open to a Midwest RGGI. We should not expend our limited political capital on a Midwest RGGI strategic initiative where we just don’t have support from the current Governors and, ultimately, their state EPAs/DNRs. For those who hope or believe otherwise, to paraphrase Jerry McGuire: “show me the states” who will sign up (beyond maybe Minnesota and, perhaps, Illinois).
Three House members in Illinois and Iowa switched from Ds to Rs, and one House seat in Nebraska switched from an R to a D. Two open Senate seats switched parties: in Iowa, Republican Joni Ernst was elected to follow long-time Democrat stalwart Tom Harkin, and, in South Dakota, Republican Mike Rounds was elected to succeed Democrat Tim Johnson. Democrats retained three contested Senate seats: Senators Dick Durbin (D-IL) and Al Franken (D-MN) comfortably won re-election, and Gary Peters (D-MI) was elected to succeed Democrat Carl Levin. The Midwest Senate delegation, overall, is evenly balanced among Democrats and Republicans.
The partisan tables turn in 2016 because there is much greater turnout in Presidential election years, which historically favor Democrats, and more Republican Senate seats are in play. Unlike in 2014, Republicans will be defending 24 seats as compared to 10 seats for the Democrats in 2016. The Midwest states are likely to be a key Presidential and Senate battleground, along with states such as Colorado and Florida. Republican Senate seats in Illinois (Kirk), Iowa (Grassley), Pennsylvania (Toomey) and Wisconsin (Johnson) are likely to be among the nation’s most hotly contested races whether the current incumbents run or retire. All of these seats, currently held by Republican incumbents, were carried by President Obama in 2008 and 2012.
Democrat Mark Dayton won re-election in Minnesota, but Illinois Governor Pat Quinn (D) lost to Governor-elect Bruce Rauner (R). Republicans retained the governorships in Iowa, Michigan, Ohio, South Dakota and Wisconsin. Republicans now control the governorships in all of the Midwest/Great Plains states, except for Minnesota and Missouri.
Although the compositions of the state legislatures were not expected to change dramatically, there were some shifts. Republicans achieved majority control in the Minnesota House through an 11-seat pickup largely by gaining seats in rural areas, and they solidified their control of both the Wisconsin Senate and House. Democrats kept control of the Iowa Senate and maintained veto-proof majorities in the Illinois Senate and House.
Illinois had a tight gubernatorial election, a not-close U.S. Senate race, and five hotly-contested Congressional races, which resulted in two seats switching from Democrats to Republicans. The Illinois General Assembly remains overwhelmingly Democratic.
U.S. Senate: Three-term U.S. Senator Dick Durbin (D) was opposed by State Senator (and ice cream baron) Jim Oberweis (R). The race was never close, and Senator Durbin won his fourth term 53%-43%. Senator Durbin has been a longstanding leader on important environmental, clean energy and high-speed rail funding issues. ELPC looks forward to continue working closely with Senator Durbin, who will likely be the Assistant Senate Minority Leader in the next Congress.
U.S. House of Representatives: Four years ago, Illinois was a battleground state in which several Democratic House seats fell to Republicans. Two years ago, following remapping, Democrats won five of the six contested House races. This year, Republicans made strong runs to retake those five seats and succeeded in switching two of Illinois’ 18 House seats:
Governor: Incumbent Governor Pat Quinn (D) was running for a second full term following his ascension to the Governor’s office in January 2009 after the impeachment trial of the former governor. He was successfully challenged by businessman Bruce Rauner (R), who won the hotly contested race by a 51% – 46% margin. Rauner won 101 of Illinois’ 102 counties; Quinn only won Cook County (Chicago area). The Quinn/Rauner race surpassed all previous spending records in Illinois, passing the $97 million mark (at least).
Governor Quinn supported many environmental and clean energy initiatives and was a champion of high-speed rail development. However, his Illinois Department of Transportation vociferously advocates the highly-controversial Illiana Tollway (as well as the proposed Peotone Airport), which is being challenged by ELPC, Openlands, Sierra Club and many other conservation organizations. Governor-elect Rauner was mostly silent on these issues during the campaign. He has been supportive of conservation organizations and has voiced support for clean energy. Let’s see.
There was little in play in Indiana with no open Senate seats and Republican Governor Mike Pence in the middle of his first term. There were no changes or especially close races among Indiana’s Congressional seats: seven held by Republicans and two held by Democrats. Both houses of the Indiana Legislature are strongly Republican, and that did not change.
Iowa was a battleground state with an open Senate seat, three hotly-contested Congressional seats, and control of both state legislative chambers potentially in play. Governor Terry Branstad (R) ran for a sixth term and was not closely challenged. Republicans gained a U.S. Senate seat and an additional Congressional seat. Republicans strengthened their majority in the Iowa House while Democrats maintained their slim State Senate majority.
U.S. Senate: Five-term Senator Tom Harkin (D) announced his retirement, opening this seat for the competitive race between Democrat Bruce Braley, Iowa’s 1st District Congressman, and Republican Joni Ernst, an Iowa State Senator. Braley and Ernst appear to have very different views on environmental issues, especially implementation and enforcement of the Clean Water Act. Senator-elect Ernst won by an 8.5% margin after what had appeared to be a much closer race. Some preliminary post-election analysis suggests that Republicans effectively identified “low-propensity” Republican-leaning voters and encouraged them to cast ballots early, and even though Democrats spent millions more in 2014 than in 2010, their turnout was lower.
U.S. House of Representatives: Republicans captured seats in three out of Iowa’s four Congressional districts as two seats opened when Congressman Bruce Braley (D) ran for Senate and Congressman Tom Latham (R) retired:
Governor: Incumbent Republican Governor Terry Branstad was seeking his second consecutive and sixth overall term as Governor. He previously served four consecutive terms that were followed by two Democratic governors (Vilsack and Culver). Governor Branstad outspent his opponent Democratic State Senator Jack Hatch by a 10:1 margin, and he handily won re-election by a 22% margin. Branstad has been a national leader on wind power development issues and is promoting a new parks initiative in his new term as Governor.
State Legislature: The Iowa Legislature has been narrowly divided and remains so. The Senate is controlled by the Democrats with a narrow 26-24 majority. The House is controlled by Republicans who picked up four seats to strengthen their majority to 57-43.
Michigan was also a battleground state with an open Senate seat and a hotly-contested gubernatorial race with first-term Republican Governor Rick Snyder up for re-election. Republicans gained ground in the state House and now have a super-majority in the state Senate.
U.S. Senate: Long-time Senator Carl Levin (D) announced his retirement, opening the seat for a contested race between Democratic Congressman Gary Peters and Republican former Secretary of State Terri Lynn Land. This race was sometimes considered a possible Republican pickup, but Senator-elect Peters won by a large 13% margin, thus holding the Democratic seat. Senator-elect Peters supports action on climate change and expressed pro-environmental positions during the campaign while Land opposed to taking action on climate change.
U.S. House of Representatives: There were no especially close races for Michigan’s Congressional seats, which include nine Republicans and five Democrats.
Governor: Incumbent Republican Governor Rick Snyder was running for a second term and faced vigorous opposition by Democratic former Congressman Mark Schauer. Governor Snyder won re-election by a 4% margin. Governor Snyder has been a leader advancing high-speed rail development in Michigan and the Midwest, and he has indicated that renewable energy development and energy efficiency advances will be a focus of his second term.
Senator Al Franken and Governor Mark Dayton each won their elections for a second term in office. Democrats held control of the state Senate, but Republicans gained 11 seats and control of the state House.
U.S. Senate: Senator Al Franken (DFL) was opposed by businessman Mike McFadden (R), but it was a very different race than six years ago when Senator Franken won election by defeating an incumbent Republican Senator by an exceedingly close 312-vote margin. This election, clean energy supporter Senator Franken won re-election by more than a 10% margin.
U.S. House of Representatives: Minnesota has eight Congressional seats, which include five Democrats and three Republicans. None of the seats changed hands. Following tough and expensive campaigns, Congressman Rick Nolan (D) won by a 1.5% margin, Congressman Collin Peterson (D) won by a 9.5% margin, and Congressman Tim Walz (D) won by an 8.5% margin.
Governor: Incumbent Democratic Governor Mark Dayton faced challenger Republican former state legislator Jeff Johnson, and he won by 6% margin. Dayton has been supportive on environmental and clean energy issues. He is now the Midwest’s sole Democratic governor.
State Legislature: Despite losing every other statewide race to Democrats, Minnesota Republicans succeeding in flipping the Minnesota House in their favor. Their 11-seat pickup reflected a strategy of contending that Democratic-controlled state government is out-of-touch with rural Minnesotans. Republicans gained 10 seats in greater Minnesota to come away with a 72-62 advantage in the House. Democrats retained their Senate majority.
There was little in play in North Dakota with no open Senate seats and Republican Governor Jack Dalrymple mid-term. Congressman Kevin Cramer (R) easily won re-election to North Dakota’s sole Congressional seat. The state legislature continues to be heavily Republican; however, State Senators Connie Triplett and Tim Mathern, who have been supportive of ELPC’s efforts to require capturing of flared natural gases, were re-elected. Governor Dalrymple has also recently expressed concerns about flared gases in Bakken oil drilling. Unfortunately, a ballot measure designed to provide more state conservation funding suffered a crushing defeat after the oil industry’s heavily-financed ad campaign in opposition.
Ohio did not have a Senate race, and incumbent Republican Governor John Kasich was not effectively challenged for a second term by Democrat Ed Fitzgerald, the County Executive of Cuyahoga County. The race was never close, and Governor Kasich was re-elected by a 31% margin. Ohio has 16 Congressional seats – 12 Republicans and four Democrats. None of the seats changed hands, and no races were close following the remapping that advanced Republicans and packed Democrats in a few districts. All of Ohio’s state-wide elected officials are Republicans, and both houses of the legislature are controlled by Republicans with veto-proof margins that did not change.
Incumbent Republican Governor Dennis Daugaard, who has chaired the bipartisan Governors’ Wind Energy Coalition, easily won re-election over Democratic candidate Susan Wismer, a South Dakota House member. Likewise, incumbent Republican Congresswoman Kristi Noem easily won re-election over Democrat Corrina Robinson by 66.5%-33.5%. She supports extending the Production Tax Credit (PTC) for wind power development and has supported the Farm Bill’s clean energy programs. Both South Dakota legislative chambers are overwhelmingly Republican, and that did not change. The U.S. Senate race, however, was more interesting.
U.S. Senate Race: There is an open Senate seat due to the retirement of Democratic Senator Tim Johnson. Former two-term Republican Governor Mike Rounds was a strong candidate, but the election became complicated because of a scandal dating from the Rounds gubernatorial administration and due to the entry of third-party candidate Larry Pressler, who had previously served as a Republican U.S. Senator, and fourth-party candidate Gordon Howie. The final election returns show Republican Senator-elect Mike Rounds winning with 50.4% over Democratic candidate Rick Weiland (29.5%), Independent candidate Larry Pressler (17%) and Independent candidate Gordon Howie (3.0%). We will likely differ with Senator-elect Rounds on many environmental issues, but expect to work with him to advance some renewable energy policies and to extend the federal Production Tax Credit (PTC) to encourage more wind power development.
Wisconsin had no U.S. Senate Race and no close U.S. House races in the gerrymandered districts, but it held its third hotly-contested gubernatorial election in four years, which Republican Governor Scott Walker won. The state House is controlled by Republicans, who also have a narrowed majority in the state Senate. Both chambers are expected to be hostile on many key environmental issues and supportive of Governor Scott Walker’s policies. Their victories give Republicans almost complete control of Wisconsin state government for another two-year legislative session. Environmentalists will be greatly on the defensive.
Governor: There’s little to be said here that’s not well-known by most readers. Incumbent Republican Governor Scott Walker, whose anti-environmental record is clear, faced Democratic challenger Mary Burke, a former executive at Trek Bicycle Corporation and Secretary of the Wisconsin Department of Commerce. The gubernatorial race was close from the beginning, and Burke gained endorsements from several state papers, including the moderately conservative Wisconsin State Journal. On Election Day, Governor Walker won by a 5.7% margin. Environmentalists and many others will be analyzing this race particularly because Wisconsin is likely to be a key Presidential election battleground state with a targeted Senate race.
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The Environmental Law & Policy Center sees both strategic opportunities for progress and major challenges with the federal government’s and many states’ fiscally constrained budgets. We look forward to discussing both paths with our colleagues and diverse potential allies. As the views of these newly-elected public officials become clearer and they move from campaigning toward governance, ELPC will continue to assess both ways of seizing opportunities and responding effectively to the challenges. ELPC looks forward to working together with our colleagues and diverse coalition partners to achieve environmental progress and economic development together. We will keep you informed going forward. Please let us know if you have any questions or suggestions.
ELPC’s Robert Kelter spoke with JohnFunk of the Cleveland Plain Dealer about FirstEnergy’s plan to gut long running and successful energy efficiency programs.
This story is reposed from the Cleveland Plain Dealer and can be found at:
AKRON, Ohio — FirstEnergy is abolishing most of its Ohio consumer and business energy efficiency programs by the end of the year — on the grounds that the elimination will lower monthly electric bills.
The company will continue similar programs in Pennsylvania and in other states where FirstEnergy also operates local power companies, but where lawmakers have not changed state laws to create an opportunity to end efficiency subsidies.
In Ohio, where the Republican-controlled General Assembly did change the law, FirstEnergy will on Dec. 31 end consumer cash rebates for everything from LED light bulbs to ceiling fans, from household appliances to whole house air conditioning, from heat pumps to geothermal heating.
Also going away are discounted household energy audits and cash rebates to homebuilders and buyers of very high-efficiency homes. Parallel programs for businesses are also disappearing.
A company spokeswoman explained Wednesday that since customers have been paying for those subsidized programs through increases in rates, monthly bills would be lower when the programs are eliminated.
Spokeswoman Diane Francis said the company had not calculated the extent of consumer savings when the programs are gone but that overall savings for FirstEnergy’s Ohio customers — including commercial and heavy industry — would be “tens of millions of dollars.”
But Tuesday, FirstEnergy’s top executive for rates and regulatory affairs, William Ridmann, said consumers on average are paying about $4.50 a month in extra charges to pay for the efficiency programs.
In the last five years the total cost of the efficiency programs, including programs to help heavy industry become more efficient and competitive, had led to about $1 billion in temporary charges, he said. Ridmann did not say how much the upgrades had saved customers in power costs.
They want to sell more higher-priced electricity and are throwing their customers under the bus,” Robert Kelter, Environmental Law & Policy Center.
FirstEnergy told a happier customer story in reports to the Public Utilities Commission of Ohio in 2012 comparing the anticipated cost of the programs over the coming three years to the savings created by reducing the amount of power purchased.
And in individual attachments for each of its Ohio companies accompanying that overall report, the company said it had achieved a balance between costs and anticipated savings.
“The Company believes that it has prepared an EE&PDR (energy efficiency & peak demand reduction) strategy as reflected in this three year Plan that balances near-term energy savings opportunities among all rate classes with longer-term programs that continue to create jobs and build capacity for delivering greater energy and demand reduction impacts in the future,” those introductory remarks noted.
A 2013 report to the PUCO looking back at costs and benefits for that year and 2012 showed generally that for every $1 spent on energy efficiency, customers had saved more than $2 in power costs.
The company’s conclusion was based on a series of complicated calculations, a process that FirstEnergy’s spokeswoman Francis on Thursday said may not have been the most accurate way of figuring, though the company has not amended the reports to say otherwise.
Francis pointed to a footnote in the reports stating that the calculations did not take into account customers who did not apply for the rebates, and said only 7 percent of its residential customers participated.
Still, that two-to-one assertion caught the eye of energy efficiency advocates and environmental groups earlier this year when they were opposing the passage of legislation backed by FirstEnergy that weakened the state’s efficiency standards and opened the door to what the company is doing now.
“The facts don’t bear this out,” said Samantha Williams, a staff attorney for the Natural Resources Defense Council, of FirstEnergy’s current claim that the programs are a financial burden to customers.
“FirstEnergy’s own analysis shows that efficiency works and saves customers two-to-one on their investment,” she said, referring to the series of complicated calculations in the reports, calculations used by all utilities.
As for the issue in the footnote, Williams said the company’s argument ignores the system-wide benefit, namely that efficiency suppresses overall demand, lowering power prices.
“Actually, what’s best for customers is keeping the efficiency programs and helping them save money,” she said, adding that FirstEnergy is the only Ohio utility ending the programs.
Robert Kelter, an attorney with the Environmental Law and Policy Center in Chicago, said FirstEnergy has steadily resisted creating the programs. Staffs from the ELPC and the NRDC meet regularly with employees from each Ohio utility to suggest efficiency programs, he said.
The company then files details of its programs with the PUCO under protective order, preventing others from revealing details.
“It’s clear from this filing that they want their unregulated affiliate (FirstEnergy Solutions) to be able to sell more higher-priced electricity and are throwing their customers under the bus,” said Kelter.
“They are cutting out 50 to 75 percent of all their efficiency programs. Demand will not continue to fall as it has. There is no question that prices will go up and that shareholder profits will go up.”
Kelter was referring in part to industrial customers.
FirstEnergy notes in its amended plans filed Wednesday with the PUCO that its large industrial customers will no longer have to participate at all in the utility’s efficiency programs but instead will have to run their own programs and report directly to the state. That is another provision of the recent changes in state law. Industry has chaffed at having to abide by state-mandated efficiency rules and pay hefty extra charges. And as they leave, FirstEnergy will no longer have to count the power they use or save in its calculations.
FirstEnergy’s move to scrap the programs comes less than two weeks after a bill imposing a two-year freeze on Ohio’s energy efficiency standards became law.
The language in that legislation — Senate Bill 310 — is what FirstEnergy is relying on to amend its programs. While the entire bill is temporary — the freeze is for only two years — FirstEnergy’s changes to its efficiency programs are permitted to be permanent. And that may lead other utilities to follow FirstEnergy.
“FirstEnergy is playing its traditional role of driving a train through the loopholes ahead of all other utilities, said Mark Shanahan, energy adviser to former Gov. Ted Strickland. “And doing it under the guise of helping customers.”
Story re-posted from Midwest Energy News
Last year, Ameren Corp. basically paid Dynegy Inc. to take five aging coal plants in downstate Illinois off its hands.
Now Dynegy is seeking to make those plants more profitable, through changes to the way they are paid for capacity – potential future generation that can be called on if needed.
Critics of the plan say the changes would mean higher costs for ratepayers with little, if any, improvement in reliability.
The plants provide power to the utility Ameren Illinois, which is part of the Midwest Independent System Operator (MISO) regional transmission organization (RTO). MISO runs an annual capacity auction wherein generators are paid for power they will be prepared to provide if needed.
ComEd, which distributes power to northern Illinois customers, is part of the PJM, a separate RTO. The PJM also holds capacity auctions, but every three years. The prices paid for capacity in PJM’s market are much higher, with a clearing price of $125.99/MW-day in PJM for 2014/2015 versus $16.75/MW-day in MISO.
Dynegy has indicated they want Ameren Illinois to switch into the PJM, so Dynegy plants could sell their power in the higher-paying PJM capacity market. Or alternately, Dynegy would like to see MISO change the structure of its capacity market, including with auctions that look farther in the future than the current setup.
Either way, Dynegy would likely get significantly higher payments for capacity promises from its Illinois power plants.
Dynegy spokesperson Katy Sullivan said this is necessary in order to ensure there is enough financial incentive to build new generation or implement energy efficiency measures to be sure future demand in the region can be met. She said that since currently the MISO capacity auctions happen in the spring only about six weeks before that power is on call, generators and utilities may not be able to adequately prepare for demand.
“There’s not an adequate signal for additional investment far enough in advance for the investment to occur before they’re in a shortage situation,” she said.
But critics of the potential moves say that there is no concern about power availability for the foreseeable future, and that Dynegy is just trying to get more revenue at the expense of the ratepayers who ultimately pick up the tab for capacity.
Energy consultant Mark Pruitt did an analysis showing that if the switch to PJM was made under current capacity prices, consumers in Ameren’s downstate Illinois territory would pay a total of about $302 million per year more, which would translate to roughly $8 more per month for average users. (Ameren Corp., which transferred the coal plants to Dynegy, is the parent company of Ameren Illinois).
“Capacity markets are not really markets per se, they’re constructs that are aimed at a fixed outcome – they are designed at least in PJM’s case to give generators more revenue,” said Dave Kolata, executive director of the Citizens Utility Board. “Certainly from Dynegy’s point of view I can understand why they would want to have a market that gives them more money. But that’s certainly not in the consumers’ interest.”
Sullivan said that Dynegy is not seeking higher prices in capacity auctions necessarily but rather that the company wants to sell power in a market that has a farther-ranging outlook – like PJM’s three years – which would theoretically provide more stable capacity prices over time.
“We think there’s incredible value in looking out years into the future,” said Sullivan. “The benefits of that are you have time to start looking at things like transmission investment or potentially siting and constructing a power plant in response to what looks like a signal for additional investment. You have a chance to build a robust energy efficiency program and get consumers on board.”
Energy experts say that there are no reasonable concerns about power availability in MISO in the foreseeable future, hence they don’t see a pressing need for capacity markets with a longer outlook.
“In Illinois we have a surplus of capacity, there’s no risk in the medium-term of any reliability concerns,” said Kolata. “You never know in the future, but if you look at the trends, especially with smart grid being deployed, and we should see radical improvements in efficiency, and we’re starting to see solar being cost-competitive. I don’t think there are really capacity concerns.”
Kolata said there are some aspects of PJM’s capacity market which he thinks are structured better than MISO’s, including that “it’s easier to incorporate energy efficiency and demand response.”
Currently the MISO market has a “vertical curve” wherein the capacity prices can quickly fluctuate between the high and low ends. PJM’s auction by contrast has a sloping, more gradual curve.
“It’s just a market dynamic that we see as undesirable, particularly as it affects consumers in Illinois who have this risk of volatility and inadequate investment” in new generation or energy efficiency, driven by capacity payments, Sullivan said.
Pruitt said that it is not clear PJM is always more stable than MISO, and regardless that may not be the top concern for ratepayers.
“Even if you are getting stability, do you want high and stable prices or low and unstable prices?” he asked.
How it would happen
MISO could change the structure of its capacity auction (called the Resource Adequacy construct), after going through a stakeholder process. In response to questions about the likelihood of a process sparked by Dynegy’s concerns, a MISO spokesperson provided this statement:
“MISO’s mission is to ensure reliable, least-cost delivered energy for all electricity consumers – today and in the future. As a not-for-profit member-based organization, we continually focus on value creation for all of our members. We actively engage stakeholders through an open and transparent process that allows us to handle a variety of issues”
In order for Dynegy’s Illinois plants to sell into the PJM capacity market, Ameren Illinois would have to decide to switch into PJM, then gain approval from the Illinois Commerce Commission and the Federal Energy Regulatory Commission (FERC). Ameren officials have stated they don’t intend to make the switch.
The Illinois state legislature could potentially pass legislation demanding Ameren make the move. Lobbying on this front is expected leading up to the spring legislative session. And the effort is expected to play out in tandem with Exelon’s attempts to get favorable treatment for its financially troubled six Illinois nuclear plants in state legislation that will determine how Illinois complies with federal carbon rules. Exelon has also expressed discontent with MISO’s market structure.
“Dynegy and other generators will say if Exelon is getting a handout we need something to increase our own valuation,” said Pruitt.
Kolata said that advocates will be ready to push back against any pressure on the legislature to force the switch in RTOs.
“Why should Illinois legislators approve Dynegy and central and southern Illinois moving to the PJM transmission organization on the East Coast when it will cost consumers in Illinois about $1.5 billion over five years?” asked Environmental Law & Policy Center (ELPC) executive director Howard Learner, referencing Pruitt’s calculations of cost increase and the fact that the PJM stretches east from Illinois over parts of 13 states and Washington D.C. The acronym refers to Pennsylvania, (New) Jersey and Maryland.
Learner noted that down the road inclusion of southern Illinois in the PJM could trigger the building of major power lines to better connect Illinois generation to demand centers further east. “And ratepayers would be socked for that too,” he said.
Dynegy’s push to move southern Illinois into the PJM or to change MISO capacity auctions could be seen as a way to keep the troubled coal plants it acquired from Ameren viable. Sullivan said that Dynegy has no intention of closing those plants, and that they are already compliant with the Mercury and Air Toxics Standards (MATS), federal rules which have forced many old coal plants to make costly upgrades.
Critics say that changes which cost ratepayers more money are not a fair way to keep Dynegy’s newly acquired plants afloat.
“They’ve known which wholesale market they’ve been located in for quite some time – this circumstance should not be a surprise,” said Pruitt.
“If Dynegy makes a business decision to close the plants – they make that decision,” said Kolata. “We shouldn’t change the market rules to get them higher profits.”
Learner framed the changes Dynegy is seeking as essentially taxpayer subsidies even as it is in the midst of a multi-billion dollar acquisition of Duke Energy Corp. plants that will double its capacity to about 26,000 MW. Currently Dynegy has 13,000 MW of capacity in five states, about 7,000 of that being from the Illinois coal plants.
“Dynegy should retrofit or retire the plants or convert to natural gas based on whether in a competitive market the plants are winners or losers,” Learner said. “Illinois consumers shouldn’t be called on to pay billions over the next decade to subsidize Dynegy’s profit margins and some of the coal plants that simply aren’t competitive.”
The ELPC and CUB are members of RE-AMP, which also publishes Midwest Energy News.
Electric rates for homeowners and other residential customers of We Energies could go up nearly 5% in January, depending on how state regulators decide the utility’s 2015-’16 rate case this fall.
While the overall rate increase is proposed to be just under 2% — staying below the projected inflation rate — residential customers would see rate increases exceeding the projected inflation rate next year.
We Energies customers pay the second-highest electric rates in the state, according to the state Public Service Commission. Since 2005, We Energies’ residential bills have increased 51%, while inflation is up 22%.
The Milwaukee power company’s rate request comes as its parent company, Wisconsin Energy Corp., is seeking approval for a $9.1 billion acquisition of Chicago-based natural gas and electric utility Integrys Energy Group.
In Illinois, Integrys and Wisconsin Energy have promised to keep rates unchanged for two years — provided the Illinois Commerce Commission allows rates to increase in early 2015, before the acquisition closes.
But an Illinois customer group wants natural gas charges in the Chicago area frozen at current levels rather than after another increase takes effect. In Wisconsin, customer groups haven’t made a formal request for concessions related to the acquisition, but have said regulators should ensure customers benefit from the deal.
In a bill message appearing in the mailboxes of 1.1 million customers across the state, We Energies explains its rationale for the rate increase and the changes it’s proposing in how customers are charged.