Governor Requests More Analysis of Downstate Power Market
By Jeffrey Tomich
Illinois Gov. Bruce Rauner (R) is asking state regulators to further analyze potential policy options to ensure there’s ample generating capacity to meet electricity demand in the southern half of the state.
In a letter to the Illinois Commerce Commission chairman yesterday, Rauner adviser Mischa Fisher asked ICC staff for an updated snapshot of “resource adequacy” in downstate Illinois following a pair of workshops on the issue.
The letter also asked the commission staff for an “evidence-based assessment” of comments received by the commission by early April as well as to provide a “technical understanding” of potential policy solutions.
Fisher’s letter was in response to a 164-page report of ICC’s proceedings to study the downstate power market. The report, made available yesterday, made no recommendations. It simply summarized comments from more than three dozen parties that participated.
While the ICC doesn’t regulate power prices in Illinois, which restructured its retail electricity market two decades ago, Rauner asked the commission to evaluate concerns raised by power plant owners and the Midcontinent Independent System Operator (MISO) about the region’s ability to keep the lights on.
MISO, in fact, triggered the study with a May 1, 2017, letter from CEO John Bear to the governor and legislative leaders noting that the Federal Energy Regulatory Commission rejected a proposal to overhaul the capacity market in the southern part of the state and that “additional action is needed in downstate Illinois to maintain reliability.”
Generator Dynegy Inc., which owns a half-dozen coal-fired power plants in central and southern Illinois, has for years warned that MISO’s capacity market didn’t incentivize investments needed to keep power plants running or attract new ones.
Last fall, a legislative committee heard testimony on a Dynegy-backed bill that would require the state to take over capacity procurement for consumers in the southern half of the state who buy energy from alternative suppliers (Energywire, Nov. 8, 2017).
Critics including consumer groups and environmental advocates panned the bill as a Dynegy bailout and said downstate Illinois has ample generating capacity.
The groups pointed to a June report by MISO and the Organization of MISO States, a group of utility regulators in MISO’s footprint, that showed southern Illinois with a surplus of capacity over the next five years.
What’s more, they say, the Future Energy Jobs Act, signed by Rauner in 2016, will spur development of additional wind and solar generation and energy efficiency investments (Energywire, July 13).
“Illinois is a net exporter of electricity, has a surplus of generation and clean wind power and solar energy and, energy efficiency resources are taking off,” Howard Learner, executive director of the Environmental Law & Policy Center, said in a statement yesterday. “There is no justification for a consumer-funded bailout of Dynegy’s uneconomic old coal plants.”
MISO, in its comments to the ICC, maintained that action is necessary to “ensure long-term investment in electric resources.” But the grid operator suggested there’s no crisis brewing.
“The short-term resource adequacy outlook is positive for Illinois,” MISO said.