Lawmakers are considering two clean energy bills. Which is better for southern IL?
Pastor Kevin James of Macedonia Baptist Church in East St. Louis has watched respiratory diseases, headaches and other health problems hit his community hard because of coal-fired power plants and heavy industry in southwestern Illinois.
Closing the plants would be a step forward, he said. A bill backed by clean energy advocates, under consideration in the legislature, would close all fossil fuel powered plants by 2030.
“We know all too well the impacts of plants,” James said at a recent virtual town hall. “While we know that there are arguments regarding the jobs connected to these plants and the lives that would be impacted by any reimagining, we must think about the grave impact that these plants pose to the health of our community as a whole.”
A competing bill backed by Ameren Illinois, one of the state’s largest energy utilities, takes a slower approach. It would replace carbon-emitting energy with renewable resources without phasing out fossil fuel-fired plants.
Tony Funderburg, village administrator for the metro-east town of Freeburg, said “there’s no way” renewable energy can reliably meet southern Illinois’ power needs. Shutting the plants down prematurely, he believes, would be costly and naive.
“Everybody gets power from those plants,” Funderburg said. “From a common sense standpoint, you have to look at energy created, and can you produce that and guarantee that energy is going to be there?”
The Chicago market gets most of its energy from nuclear power, while 84% of energy downstate comes from fossil fuel plants, according to Ameren Illinois president Richard Mark.
But time is winding down for fossil fuels in southern Illinois, a reality both sides acknowledge. Twelve of 22 coal plants in Illinois have closed since 2009, and several more are slated to shutter in the next few years. The region is and will become increasingly reliant on energy from other states.
The questions are: How quickly will Illinois move? And who will pay?
Who’s behind the Illinois energy bills?
Ameren backs the Downstate Clean Energy Affordability Act (SB 311/HB 1734), which it says will deliver clean energy and jobs at a fraction of the cost compared to the competing legislation.
The Illinois Clean Jobs Coalition, a group of environmentalists and clean energy advocates, says the Ameren plan doesn’t go far enough to protect southern Illinoisans from a dying coal market and the effects of greenhouse gases.
The coalition supports the Clean Energy Jobs Act (SB 1718/HB 804), or CEJA.
CEJA would move Illinois to 100% renewable energy by 2050 and close carbon-emitting power plants by 2030. The downstate bill calls for construction of large-scale solar facilities in underserved communities and establishes incentives for electric vehicle purchases.
Ameren’s plan isn’t as aggressive. It has no provisions for shuttering coal plants, and would shift to 32.5% renewable energy by 2030 as opposed to CEJA’s first goal of 25% reduction by 2025. In 2019, renewable energy accounted for 8% of the energy generated in Illinois, according to the U.S. Energy Information Administration.
It’s not enough, says J.C. Kibbey, a Chicago clean energy advocate for the Natural Resources Defense Council. The council backs the coalition supporting CEJA.
“The cost of inaction on climate change is almost immeasurable,” Kibbey said. “Ameren’s plan just isn’t up to the scale of addressing climate change.”
But opponents criticize the bill as favoring Chicago and northern Illinois. A key part of the legislation creates a special energy market for the northern region.
“This program is designed for Chicago,” Mark said. “The people who have written (CEJA) have no understanding of southern Illinois versus Chicago, and we feel southern Illinois is being neglected.”
Ameren talked to downstate lawmakers to “help them design a legislation” that works for southern Illinois, Mark said. Proponents of CEJA worked with downstate residents, Kibbey said.
“We had meetings in communities all over the state to ask people what they want their energy future to look like,” Kibbey said. “Those conversations were what ultimately informed what went into our bill.”
Costs to Illinois consumers
Ameren says energy costs would go up for southern Illinoisans if CEJA became law because more energy will have to be imported from other states. Proponents of the clean energy act say the utility is using scare tactics to maintain the status quo.
While northern Illinois relies more on nuclear and solar, southern Illinois does not. If more coal plants were to close prematurely, it could mean a heavier reliance on imported energy, Mark said. The cost for Ameren to buy power from the regional energy market could go from $5 per megawatt day to about $255 per megawatt day, a cost Mark estimates would cost consumers $8 billion over the next 30 years.
Other costs could be passed onto the customer from increased caps on subsidies paid to solar project developers and from the price of subsidies for installing renewable energy infrastructure, Mark said.
But CEJA would make it possible for downstate to catch up on renewable energy development and create clean energy jobs while coal plants phase out, Kibbey said. While the coalition’s plan puts the cost onto fossil fuel burners, he added, Ameren would rather pass the cost onto taxpayers.
CEJA would place a 6% tax on the sale and use of coal in Illinois. The money would pay for renewable energy business tax incentives, workforce training, site cleanup and local tax revenue replacement. Savings on energy costs in northern Illinois could be redirected to pay for renewable energy expansion, according to the Illinois Clean Jobs Coalition, although it wasn’t clear if those savings would specifically assist downstate development.
Ameren’s plan, introduced by Democratic state Rep. LaToya Greenwood of East St. Louis, relies on building large-scale solar facilities downstate to replace the energy lost from closing coal plants, said company spokesman Brian Bretsch. Greenwood says union labor and diverse contractors would do the construction with a focus on building in underserved communities. The solar fields would feed into existing infrastructure.
The company would sell the energy on the wholesale market, then Ameren would credit the proceeds back to customers’ energy bills. Construction costs would be recouped through rate-setting and would be based on performance, Bretsch said. Ameren estimates this provision will cost an additional 75 cents on an average monthly residential bill. The company’s overall share of the solar market would be limited to 20%.
CEJA, Bretsch added, would cost Ameren customers $20 billion over 30 years, a price tag Greenwood has repeated and that Kibbey questions.
Ameren cites the following costs:
- $8 billion: New supply charges to downstate energy bills
- $3.8 billion: Increased cap on the subsidies collected from customers to pay to the developers of solar projects
- $1.2 billion: Increased subsidy for installation of higher cost renewable energy generation
- $3.5 billion: Elimination of the large customer exemption for payment into energy efficiency programs
- $500 million: New requirements for distribution planning
- $2 billion: Increased customer charges for natural gas programs
Kibbey says those numbers aren’t detailed enough.
“I have heard them throw out this big scary $20 billion number in every venue,” Kibbey said, “and every time, in front of the legislature more than once, I have said, ‘Can we see your work? Can we see where this number came from?’ Anyone can just throw out a study and if it’s not replicable, if you can’t assess it and see what the methodology was, I don’t know how we can be expected to take it seriously.”
Closing coal-fired power plants
Proponents of CEJA say they have a robust economic development plan in place to help communities when coal plants shut down, and to replace lost energy. But the Ameren president says it isn’t good enough.
Declining natural gas prices, subsidies for renewable and nuclear energy, low electric rates, and regulations have made it difficult for southern Illinois coal-fired plants to make money. The owners of a plant in Wood River shuttered the facility in 2016 and demolished it in February. The same company, Vistra Energy, announced last fall it plans to close the Baldwin Power Plant within five years.
The outlook isn’t much better. Global investment firm Morgan Stanley predicted in a February report that coal-fired power will meet its end by 2033 because of renewable energy and state efforts to eliminate carbon emissions. Coal could see a boost in 2021 because of predicted higher natural gas prices, but its relevance will decline thereafter, the firm reported.
President Joe Biden also outlined new climate goals Thursday that rely on phasing out coal and reducing U.S. carbon emissions by half by 2030.
“We can stick our heads in the sand and pretend they’re going to be running forever, but that’s not going to happen,” said Kibbey, who grew up seeing coal plants shut down in Lansing, Michigan. “The incredible opportunity is sometimes what gets lost with the mourning of the transition away from fossil fuels.”
Not only are coal plants some of the biggest polluters in the United States, but the companies often close without leaving any economic development support or property tax replacement plans, Kibbey said.
All the more important to begin planning now for the inevitable transition to renewable energy, he added. CEJA provides job training and economic development along with child care and transportation stipends with an emphasis on communities particularly impacted by coal plants closing.
But CEJA doesn’t present enough of a backup plan for closing plants, Mark said.
“It just says shut them down, and that’s our concern.”
CEJA’s provisions would jumpstart a solar economy, supporters say, but Mark said southern Illinois needs a better plan to build up renewable energy infrastructure.
Illinois’ 2017 Future Energy Jobs Act, for instance, didn’t have the effect on the clean energy economy backers hoped for. Kibbey says they’ve learned they can’t create jobs “in a vacuum,” but Bretsch says CEJA represents more of the same.
“If the state is going to have any realistic chance of getting to 100% clean energy by 2050, it can’t continue implementing the same failed approaches.”
Lawmaker support
Both of the energy bills were composed by the interested industries who secured backing from state lawmakers, largely divided by geography, to advance their plans.
CEJA has 44 sponsors in the House, all Democrats from the Chicago region or northern Illinois, and the downstate bill has bipartisan support from 43 lawmakers — including 27 Republicans — mostly from rural and downstate areas. In the Senate, CEJA has 15 Democratic sponsors from northern and central Illinois, while the downstate bill has 21, nine of them Republicans, from across the state.
Ameren Illinois and its political action committee are among the top 25 donors to Greenwood, the downstate bill’s primary House sponsor, according to political money tracking site Reform for Illinois. Ameren donated roughly $14,300 to Greenwood’s campaign from 2017 to 2020.
Both bills stand a fair chance in the legislature. They’ve passed out of committee and made progress in the House this week.
Kibbey says he believes the Illinois Clean Job Coalition’s plan aligns closer with Gov. J.B. Pritzker’s climate goals. Pritzker hasn’t endorsed either plan, but his proposals support reaching 100% renewable energy by 2050 and developing both large-scale solar fields as well as smaller community facilities.
“When I look at the governor’s proposal,” Kibbey said, “I do think that he’s aligned with every single thing in CEJA.”
This story was originally published April 24, 2021 at 5:00 AM.
