Taxpayer-funded rate relief for downstateareas is on the table: With nosebleed power | AEE Message Board Posts


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Msg  29 of 29  at  10/14/2022 12:33:19 PM  by

jerrykrause


Taxpayer-funded rate relief for downstateareas is on the table: With nosebleed power

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Taxpayer-funded rate relief for downstateareas is on the table: With nosebleed power prices south of Interstate 80 showing no signs of abating, lawmakers consider a novel solution for customers of Ameren Illinois

 

State lawmakers are considering a taxpayer-funded relief package for households and small businesses in central and southern Illinois as they continue to absorb surging electricity rates.

Gov. J.B. Pritzker supports the novel approach to rate relief, although he hasn't committed to a specific proposal, a spokeswoman says.

On the table right now is a House bill (HB 5799) that would pull $200 million from the state's Department of Commerce & Economic Opportunity for rebates to customers of downstate utility Ameren Illinois.

The bill won't be acted on until the Legislature reconvenes in November. But rates in Ameren's service area appear unlikely to decline by then.

Summer has given way to autumn, and wholesale power prices remain high. A recent procurement of electricity by the Illinois Power Agency established a price for customers of Ameren Illinois of 9.78 cents per kilowatt-hour from now until the end of May.

That's down slightly from 10.63 cents over the summer, when prices typically are significantly higher than the rest of the year. But it's 85% higher than the same stretch of time a year earlier.

CHICAGO-AREA DIFFERENCE

The story is different in the Chicago area thanks to a provision in last year's Climate & Equitable Jobs Act that requires Constellation Energy Group, the owner of six nuclear power plants in Illinois, to rebate money to Commonwealth Edison customers if power prices are above a certain threshold. For now, the rebate is more than offsetting the higher market prices.

After the rebate, the power price for ComEd customers is 16% lower than it was from October 2021 through May 2022.

DICHOTOMY

The nuclear deal set up a strange dichotomy in the state in which Chicago-area power users aren't feeling the effects of sky-high energy prices, but downstaters are.

"The administration is working with legislative leaders to offer additional relief in the months ahead," a Pritzker spokeswoman says. "He looks forward to reviewing this bill and continuing those discussions."

Taxpayer relief for utility customers, though, would be a novelty in Illinois. When prices have spiked in the past, typically utilities have been asked to dig in their pockets to fund relief.

Ameren, not surprisingly, likes the idea.

"It was a very tough summer for central and southern Illinois residents and small businesses hit hard by the spike in energy prices," the utility says in an email. "We are supportive of state legislation to provide much-needed financial relief to our customers."

But with no sign that energy prices will drop in the near future, the worry for policymakers is that downstaters will face higher rates for far longer than any bailout package will cover.

 


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