Illinois House, Senate energy panels discuss Dynegy 'bailout' request

Illinois House, Senate energy panels discuss Dynegy 'bailout' request

SPRINGFIELD — Opponents referred to a package of bills to benefit Texas-based energy company Dynegy Inc. as a "multimillion-dollar state of Illinois bailout" and urged Illinois lawmakers to act cautiously on the proposals.

Meeting jointly Tuesday, the Senate and House energy committees took no votes on the bills drafted to benefit Dynegy, which operates eight coal-fired power plants in central and southern Illinois. The company has warned lawmakers that under downstate Illinois' current electricity-distribution system, it may have to close at least four of its power plants by 2021 and possibly sooner.

"These closures would cause the loss of almost 550 well-paying union jobs and threaten approximately 4,000 indirect jobs," Dynegy said in a statement.

The appeal from Dynegy is similar to one advanced successfully last year by Exelon Corp., which got state help to continue the operation of two downstate nuclear plants, including one at Clinton.

But some of the groups that supported Exelon's plan now oppose Dynegy's. In fact, nearly all of the testimony, including from the attorney general's office, consumer groups and others, was in opposition.

Dynegy wants the state to pull out of the 15-state Mid-Continent Independent System Operator distribution system and establish its own Illinois-specific system. Dynegy claims that the larger system does not offer downstate Illinois a long-term energy commitment, and that creates "unstable and inadequate pricing" that threatens downstate electricity reliability and the region's economic viability.

But a host of others testified that downstate Illinois has an electricity surplus until at least 2022, and that Dynegy's plan would cost consumers millions.

"I think the expectation is that this new market will increase prices for consumers," said Susan Satter, public utilities counsel for Illinois Attorney General Lisa Madigan. "There's no emergency. There's no need to act now."

Bill Malcom, a lobbyist for the Illinois AARP, said the legislation would "raise rates unnecessarily."

"Many of our members are on low and fixed incomes, and they certainly don't have another $120 to give up given the many other fees and tax increases that they face," Malcom said. "Low prices are not a problem for consumers. A surplus of power is not a problem that someone needs to solve. And most importantly, downstate Illinois is not an island. It is well-connected to other states, all of which also have a surplus of low-cost electric sources."

Andrew Barbeau of the Environmental Defense Fund said Dynegy's legislation would cost central and southern Illinois electricity customers about $400 million.

"For a company with about $5.2 billion in excess capital, it's a little much for them to be asking for a multimillion-dollar state of Illinois bailout," Barbeau said.

Jack Darin, director of the Illinois Sierra Club, suggested it's time for communities with Dynegy power plants to plan for a future without them.

"The average age of a coal plant retired in the United States is just over 50 years, and that is the age of the Dynegy fleet today," he said. "Dynegy is not investing in these plants. They are not proposing to invest in these plants, even if these proposals were to become law.

"These are difficult conversations, but we need to begin preparing for a future that already has come."

Ameren Illinois, the largest electricity-distribution company downstate, said it didn't think there was an immediate need for the legislation.

"We just do not think it makes sense to try to begin this immediately," said Jim Blessing, the utility's senior director of energy supplies and corporate initiatives. "We don't think there's a short-term issue."

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DaveKNEIS wrote on November 09, 2017 at 2:11 pm

During the 3+ years of the Exelon bailout proposals, our organization pointed out 2 things: 1.)  it WAS and still IS a bailout, as is Dynegy's current attempt at legalized pick-pocketing, and 2.) the State and the Legislature can avoid many of the negative consequences of large plant closures -- energy or otherwise -- by enacting mandatory "just transitions" legislation that would require both local communities and the utilities closing power plants and mines to mutually contribute into an escrowed fund PRIOR to plant closures, to be made available upon plant closure. This would 1.) protect the essential public services that could be threatened by the sudden loss of tax base revenue, and 2.) provide a funding pool to seek alternative economic development and job replacement in the affected communities.  These ideas fell on deaf ears, probably muffled by the sound of large Exelon campaign contributions.


The age of big-box fossil and nuclear power companies is ending.  It's not a question of if, but when; and how much damage will occur in the meantime through failure to properly plan ahead.  The Dynegy bailout re-emphasizes the need for these "just transitions" programs prior to plant and mine closures, to remove the economic blackmail threats that large energy companies use on legislatures to grant bailouts.  If anybody needs a bailout, it would be the affected communities, not the for-profit corporations.  Legislators -- Reject the bailouts, support the communities!


--Dave Kraft, Director, Nuclear Energy Information Service, Chicago--