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Exelon Subsidy Could Hit $1 Billion in Illinois Energy Bill (1)

June 4, 2021, 8:47 PM; Updated: June 4, 2021, 10:32 PM

Exelon Corp. is positioned to receive as much as $1 billion over a five-year period for two of its nuclear power locations as part of ongoing talks to complete major energy legislation in Illinois, according to four sources familiar with the negotiations.

Subsidies for a two-unit, 2,347-megawatt station near Byron, Ill. and a two-unit, 1,845-megawatt Dresden generating station in Morris, Ill. are one component of larger, complex negotiations among environmental groups, state lawmakers, Illinois Gov. J.B. Pritzker (D), and several utilities to revise the state’s energy policies.

Support for the facilities could be determined by the use of “carbon mitigation credits,” according to a report published Friday by ClearView Energy Partners LLC research analyst Timothy Fox and others. The credit value would be reactor-specific and based on nonpublic financial information, the report said.

The sources familiar with the negotiations said the Exelon subsidies could total about $650 million over a five-year period, but could be much higher. Fox said the subsidies could reach or exceed $1 billion over five years, based on his calculations.

Shuttering Sites

Exelon said it would shutter its Bryon and Dresden facilities this fall, according to its Tuesday filing with the Securities and Exchange Commission.

The closure would cost thousands of jobs and be “devastating” to the state’s economy, state Sen. Sue Rezin (R) said this week. It also wouldn’t advance Pritzker’s goal of achieving a carbon-free energy sector by 2050, she said.

The Illinois Legislature adjourned for the year Monday, but state Senate President Don Harmon (D) said Tuesday that lawmakers would return to Springfield for a special session to consider passing a comprehensive energy bill. The session could be held as early as next week.

“The session is ongoing and we can’t comment on legislation that has not yet been introduced. We remain hopeful that a bill that preserves the state’s largest source of clean energy will be passed in the coming days,” Exelon spokesman Paul Adams said in a statement.

Full Decarbonization

The legislative package, in addition to supporting Exelon’s nuclear facilities, could revise how rates are structured for utility ratepayers.

That in turn would boost the state’s solar-energy infrastructure and ensure minority groups’ participation in the expansion of the state’s renewable-energy portfolio.

Environmental groups insist any deal fully decarbonize the state’s power sector, but they’re willing to allow this to happen over time. Negotiators are considering requiring all coal-fired power plants in the state to close as early as 2032, but it could end up being 2035 or even later.

Labor organizations are a key negotiator. They are pushing to save existing jobs at the Exelon facilities and secure prevailing-wage and other workplace mandates at any state supported renewable-energy facility.

Exelon may not be the only energy company affected by the legislation. Ameren Corp. is pushing to own solar-energy facilities, which would expand its Illinois role as solely an energy distributor. And Vistra Corp. is seeking state support to help transition its coal-fired plant sites to facilities powered by renewable energy sources.

(Exelon comment added in eighth paragraph.)

To contact the reporter on this story: Stephen Joyce in Chicago at sjoyce@bloomberglaw.com

To contact the editor responsible for this story: Rebecca Baker at rbaker@bloombergindustry.com

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