ComEd customers will begin receiving a credit for about $20 per month in June, an unexpected dividend from the state’s bailout of three struggling nuclear power plants last fall.
The carbon mitigation credit, which will show up as a new line item on ComEd bills through May 2023, will save the average customer $237 over a year, the Illinois Commerce Commission announced Wednesday.
The estimated $1 billion credit reflects a dramatic reversal of fortune for Illinois ratepayers and a trio of nuclear plants that were subsidized as part of the Climate and Equitable Jobs Act. In September, Gov. J.B. Pritzker signed the clean energy bill into law, which requires Illinois utilities to get 40% of their power from renewable sources such as solar and wind by 2030. The bill also provided funding to support the Byron, Dresden and Braidwood nuclear plants as clean energy sources.
ComEd parent company Exelon had threatened to close the underperforming Byron and Dresden plants without legislative action. The nuclear bailout was expected to cost ComEd ratepayers $700 million over five years, but rising energy prices combined with Russia’s invasion of Ukraine have suddenly made the three nuclear plants more profitable.
Chicago-based Exelon spun off Constellation, its former power generation subsidiary, into a stand-alone company in February.
“To date, Illinois consumers have not paid a penny to nuclear plants under the law, and instead will be receiving a substantial credit,” Constellation spokesman Paul Adams said in a statement Wednesday. “Should energy prices fall again, the law ensures that these plants have the financial security to remain in operation and continue to advance the state’s ambitious climate goals.”
While Adams said the state’s clean energy bill is “working exactly as intended,” the $1.7 billion swing from a ratepayer-funded subsidy to a credit was not the outcome many had expected when it was enacted last fall.
“It is a surprise,” said David Kolata, executive director of the Citizens Utility Board, a nonprofit Illinois watchdog group. “But the main driver of energy prices being higher is the Russian invasion, and I don’t know if people predicted that.”
Kolata said the clean energy bill acts as a hedge against fluctuating energy prices for both Constellation and the ratepayers. The subsidy provides certainty for the nuclear plants, which before the passage of the bill said they couldn’t compete with cheaper energy from fossil fuels and subsidized renewable sources such as wind and solar. With the sudden spike in energy prices, the bill now protects the consumers.
“This was in the bill, because if the nuclear plants don’t need the money, they shouldn’t get the money,” Kolata said. “We’re getting a refund being paid for by the nuclear plants, because they’re earning more than they agreed to.”
While consumers are coming out ahead in year one, lower energy prices could swing the nuclear plant bailout back to a ratepayer-funded subsidy in subsequent years, Kolata said.
The credit will appear on ComEd bills beginning in June on a line item called “Carbon-Free Energy Resource Adjustment.”
Earlier this month, ComEd filed with the ICC for a proposed $199 million increase in electricity delivery charges, seeking the largest rate hike since 2014. If approved by state regulators, it would add $2.20 per month to the average residential customer bill beginning in January 2023.
ComEd delivers electricity to more than 4 million customers across northern Illinois.