BREAKING: Demand charges removed from Illinois nuke bailout bill

Update November 23 9:20 AM EST: The provision to eliminate net metering in Illinois has also been removed from the bill, but some changes to net metering will still go through. See below for more details.

The sausage making of the legislative process is never pretty. This is particularly true in Illinois, where utility Commonwealth Edison parent company Exelon has remarkably close ties with not only the Mayor of Chicago but the Obama Administration.

But even with all that power and all those connections, Exelon and ComEd don’t always get what they want. Today legislators withdrew a controversial provision which would have imposed demand charges on residential customers from SB 2814, an enormous energy bill which also would provide a sizable bailout for aging nuclear plants in the state.

If the demand charges had stayed and the bill had passed, it would have been the only second time that demand charges were imposed on residential customers in any utility in the United States. The removal of the demand charge came a day after an internal memo in the office of Illinois Governor Rauner called these charges “insane”.

“The legislation as filed skyrockets energy prices for working families and fixed-income seniors through so-called “demand rates” that would dramatically alter the way customers are charged for their energy usage,” reads the memo from Jason Heffley, policy advisor for energy and environment to Governor Rauner. “These are not demand rates, these are insane rates – and they should be rejected.”

The provision to remove retail-rate net metering in the state and replace it with a one-time rebate on new PV systems has also been scrapped. In its place, SB 2814 will keep full retail rate net metering for residential systems until a 5% cap is reached, but community solar will only be compensated at a wholesale rate, plus a $500 rebate. Commercial and industrial installations will remain on wholesale rate net metering, and will also receive a $500 rebate.

Once a 5% cap is hit, residential solar will likewise move to wholesale rate compensation. The Sunrun-backed Alliance for Solar Choice (TASC) applauded these changes, but also said that they are waiting to see them in writing.

“We support the proposed elimination of demand charges and the reinstatement of full retail net metering. Exelon and ComEd made this verbal proposal on Tuesday to improve the bill; however, our final support is dependent on final legislative language,” said TASC Spokesperson Amy Heart.

An earlier version of the bill additionally planned to incentivize aging coal plants in the southern part of the state, but that was also withdrawn. What remains in the bill is the bailout for two nuclear plants in Illinois, but this is limited to 10 years. That this provision remains is not surprising, given that Exelon is not only Commonwealth Edison’s parent company, but the largest operator of nuclear power plants in the United States.

SB 2814 is currently being rammed through a special session of the Illinois Legislature intended for bills that were vetoed by the governor to be reconsidered. However, it is also where bills are often passed with less consideration for details.

These details have been shocking enough that two large coalitions of organizations came out against the demand charge portion if not the entire bill. Among the organizations that took a stand against the demand charges is the American Association of Retired Persons (AARP), which is a political powerhouse with 37 million members nationally.

Update: This article was updated at 2:35 PM EST on November 22 to include information on negotiations around the provision to eliminate net metering. The portion of the bill to get rid of the state’s net metering policy was not mentioned in an earlier article on this bill, as it had not been communicated by pv magazine’s sources.

Update 2: This article was updated at 9:20 AM EST on November 23 to include late-breaking news on the removal of the provision to eliminate net metering.