Illinois needs to energize the modernizing of its power supply for two reasons: helping the environment and saving customers money.
The ComEd power bills showing up in people’s mailboxes are likely to take a jump next June because of a record price spike in a so-called “capacity auction” announced on July 30, according to the Citizens Utility Board. Under a so-called “capacity auction,” owners of power plants say how much electricity they can guarantee during extreme weather conditions. If it’s not enough, prices go up. The idea is to use higher prices to incentivize additional generation.
It’s a complicated system, but here is the gist of what is happening: A company called PJM Interconnection, which operates the electrical grid for the District of Columbia and all or part of 13 states — including the Chicago area — has downgraded the amount of electricity it says can be expected from natural gas-powered plants, as it sees how such plants have fallen short elsewhere when the weather turns severe. Environmentalists have complained that PJM also underestimates the value of renewable energy sources.
At the same time, demand for electricity is shooting up, partly driven by the voracious needs of data and artificial intelligence centers. That mismatch — higher-than-expected demand and a lower assessment of how much power will be available if severe weather hits — is what raised the prices at the capacity auction and ultimately on customers’ bills.
That could hit Chicago area customers in the wallet, although they are protected to a certain extent by a provision in the 2021 Climate and Equitable Jobs Act (CEJA) that softens sudden jumps in electricity prices. In 2022, that safeguard was worth $1 billion in savings for ComEd customers when the Russian invasion of Ukraine drove up electricity prices.
Long waiting list of renewable projects
The answer for Illinois is to speed up construction of solar, wind and battery storage facilities and bring all that power to the grid. But the waiting list to connect to the grid is so long that some proposed projects die. Without those new projects, the source of electricity in Illinois will continue to come disproportionately from nuclear and the burning of fossil fuels.
As of last December, the number of proposed projects waiting to come onto the grid nationwide could generate about twice the power of all generation plants on the grid now.
It’s not easy to plug electricity from new generation facilities into a grid that Allison Clements, a former member of the Federal Energy Regulatory Commission, calls an aging network that is “increasingly old, clunky and outdated.” It requires a lot of design and engineering work. But it should be happening much faster than it is now.
On Friday, PJM presented a plan for allowing shovel-ready projects to jump to the head of the line so they aren’t poking along behind other proposals that remain in their early stages. That could help.
A number of bills and legislative ideas to speed up construction of renewable energy facilities, distribute that energy, and promote conservation and renewables in other ways are circulating in the Illinois General Assembly. What’s needed is for lawmakers to come together and hammer out legislation that speeds the transition to renewable energy and reduces peak and day-to-day demand while keeping costs down for consumers.
“There are a lot of places for improvement,” said CUB Executive Director Sarah Moskowitz.
Robyn Gabel, majority leader of the Illinois House, told us legislators are re-forming the energy group that worked on CEJA to examine the issues facing Illinois and decide the best way for the state to move forward. The group will include state representatives, state senators and representatives from the governor’s office.
An international group of climate scientists wrote on Oct. 8 in the Journal BioScience that 25 of 35 of the Earth’s vital signs are at record levels and portend a slide into irreversible climate disaster.
That’s all the more reason for Illinois to find a way to speed up its transition to climate-friendly renewable energy.
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