The Illinois Power Agency has finalized a plan to procure zero-emissions credits from nuclear power plants, but it is now seeking approval from the Illinois Commerce Commission.
On July 31, the agency submitted its final Zero Emission Standard Procurement Plan to the Illinois Commerce Commission. The plan is required by the Future Energy Jobs Act, a state law adopted in 2016 to avoid the potential shutdown of Exelon Corp.'s Clinton Power Station and the Quad Cities plants. These nuclear plants have struggled to cover operating costs given unfavorable wholesale market prices.
The plan reviews how the agency will procure ZECs on behalf of the state's three regulated utilities: Ameren Illinois Co., Exelon subsidiary Commonwealth Edison Co., and MidAmerican Energy Co. Under the law, the agency must procure ZECs through a competitive process, according to a verified petition filed with the plan. The document details the criteria that the agency will use to select winning bids, according to the petition.
Based on the plan, Ameren and ComEd have to contract for an amount of ZECs each year that equates to roughly 16% of their 2014 retail power sales. For MidAmerican, the plan specifies that the 16% target be applied to the utility's 2016 to 2017 retail power sales.
In total across all three utilities, the agency estimates that the program will procure 20.1 million ZECs per year or 201.2 million ZECs over 10 years. That amount breaks down to about 5.9 million ZECs per year for Ameren, 14.2 million ZECs for ComEd and roughly 42,200 ZECs for MidAmerican, according to the plan. To procure those ZECs, the utilities would need to pay $332.0 million in the first delivery year, though this sum would be reduced to $234.8 million as as a result of cost cap. Costs in future years could vary based on how the social cost of carbon values are adjusted, the agency said in the plan.
Under the act, the ZEC price is calculated based on the federal social cost of carbon value of $16.50/MWh. The social cost of carbon was set by a federal interagency working group and reflects the societal costs from releasing a ton of carbon dioxide emissions into the atmosphere.
The plan also discusses how the agency weighs "public interest criteria" such avoided air pollution in the bid selection process. The act requires that the agency consider the benefits from nuclear power in avoiding common fossil fuel power plant pollutants like sulfur dioxide, nitrogen oxides, carbon dioxide and particulate matter.
Should the plan get timely approval from the commission and barring other potential delays, the agency estimates that it will accept bids some time in December, according to the plan.
Under the Future Energy Jobs Act, the commission has 45 days to review the plan and determine if the plan results in the cost-effective procurement of ZECs, the agency said in the petition. The IPA released a draft in early July, but revised the plan to incorporate comments from Illinois Commerce Commission staff, power companies and other stakeholders. (Illinois Commerce Commission Case 17-0333)