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Exelon backing Illinois bill to include nukes in carbon-free capacity purchase

Exelon Corp. is supporting legislation in Illinois the company said would protect the state's clean energy programs from potential rule changes aimed at addressing the impact of state energy subsidies on the PJM Interconnection capacity market.

Sponsored by state Rep. Larry Walsh Jr., a Democrat and chair of the House Public Utilities Committee, House Bill 2861 directs the Illinois Power Agency — which already oversees electricity purchases for the state's two large investor-owned utilities, Ameren Illinois Co. and Commonwealth Edison Co. — to take over responsibility for procuring "clean" generation capacity on behalf of residents in northern Illinois.

Commonwealth Edison, serving the Chicago area and northern Illinois, is an Exelon subsidiary. Ameren Illinois, an Ameren Corp. subsidiary, serves central and southern Illinois.

Exelon and other supporters of the bill on March 14 said the so-called Clean Energy Progress Act would protect progress made under the Future Energy Jobs Act, a comprehensive energy law the state adopted in late 2016 that provides funding for renewable energy projects and has expanded energy efficiency programs. The 2016 law also included subsidies for two in-state nuclear plants that their operator, Exelon, had said would otherwise be shut down because of market conditions. Exelon operates all five of the nuclear plants in Illinois and has said recently that the three not currently receiving subsidies are at risk of having to shut down because of market conditions.

According to the company, a proposal from the U.S. Federal Energy Regulatory Commission about how resources receiving out-of-market support can participate in the PJM capacity market would interfere with key parts of the Illinois law and other state programs that support wind, solar and other forms of renewable energy.

Aside from protecting the Illinois programs, supporters said the Clean Energy Progress Act, if signed into law, would increase development of new renewable resources, such as wind and solar, and make achieving 100% carbon-free power for millions living in northern Illinois possible. The bill would also save customers money, allow Illinois' nuclear plants to sell capacity into Illinois Power Agency procurements and put Illinois on track to meet commitments set forth by Gov. J.B. Pritzker as part of joining the U.S. Climate Alliance, a coalition of state governors who are pursuing the goals of the Paris Agreement on climate change.

"The Clean Energy Progress Act recognizes there is an urgent demand from Illinois energy customers for common-sense solutions to address climate change," Exelon President and CEO Chris Crane said in a statement. "We stand with our customers and the many other supporters of this legislation who want cleaner air, good jobs and affordable electricity."

Environmental organizations, community leaders and business groups including the Chicagoland Chamber of Commerce joined in Exelon's press release supporting the bill.

The Illinois Power Agency procurement requirements apply to electric utilities serving at least 3 million retail customers that are located in PJM and would begin with the "delivery year" starting June 1, 2023, and end in the delivery year starting June 1, 2032.

Under the bill, if PJM tariffs allow a resource-specific "fixed resource requirement," the agency is to procure contracts for clean capacity. The agency's procurement plan is to evaluate whether a supplemental capacity procurement, in an amount sufficient to meet the utility's unforced capacity obligation, is in the public interest. If the Illinois Commerce Commission determines that pursuing a fixed resource requirement rather than a resource-specific fixed resource requirement is in the public interest, the agency is to conduct procurements for such additional capacity.

The bill also includes language aimed at protecting consumers that take part in the state's competitive retail electricity and natural gas markets.

Illinois lawmakers also are considering a bill to shift the state to 100% renewable energy by 2050, a proposal Exelon previously called a "positive step forward."