Illinois PIRG testimony on proposed coal bailout

Texas based Dynegy has come to the Illinois General Assembly in an attempt to make Illinois ratepayers pay more and breathe dirtier air to prop up their old, dirty, uncompetative coal power plants. I submitted testimony highlighting the absurdity of subsidizing more energy generation from diry power plants while Illinois is experiencing energy abundance.

Testimony of Abraham Scarr, Director, Illinois Public Interest Research Group, in opposition to Senate Bill 2250 / House Bill 4141

Chairpersons Hunter and LaVia, Vice-Chairperson Sandoval, Minority Spokespersons Rezin and Davidsmeyer, honorable members of the committees, thank you for the opportunity to submit written testimony in opposition to Senate Bill 2250 / House Bill 4141.

My name is Abraham Scarr and I am the Director of the Illinois Public Interest Research Group (PIRG). Illinois PIRG is a statewide, citizen funded, non-profit, non-partisan public interest advocacy organization which stands up to powerful special interests on behalf of our members and all Illinoisans.

This proposal is ill-timed, unjustified and should not proceed. 

First and foremost, there is no reliability problem to address. As the Illinois Commerce Commission white paper on this topic notes, Miso estimates that Zone 4 has a capacity surplus from 2018 through 2022. The whitepaper also notes 4,307 MW of new wind and solar generation in the MISO Zone 4 interconnection queue.  

Second, the pending sale of Dynegy to Vistra Energy has implications the General Assembly should take time to observe and understand. According to Vistra Energy, “The resulting company is projected to have a combined market capitalization in excess of $10 billion and a combined enterprise value greater than $20 billion.” 

Third, the numerous potential actions being considered by the Federal Department of Energy and PJM could all significantly impact energy markets in Illinois.

For these reasons, the General Assembly should not seriously consider this proposal.

While energy policy can be highly complex, the story behind this legislation is simple: supply and demand. Illinois restructured the electric industry in 1997, establishing a competitive market for electricity generation. The market is working: demand is declining thanks to progress in energy efficiency, and new cheaper, cleaner energy sources are entering the market and increasing their market share.

Illinois is experiencing energy abundance, not scarcity. Under such conditions, by ordinary market principles, the oldest, most expensive power generators will run less or retire. This is not a problem to solve; this is the market working. As a result, Illinois residents should pay less for power generation and breathe cleaner air.

Of course, this outcome is not preferred by powerful incumbent generation interests. Their proposed solution is to have Illinois residents pay more and breathe dirtier air so that shareholders may squeeze more profits out of old, dirty, uncompetitive power plants. Beyond those harms to ratepayers, there is an added opportunity cost: every dollar ratepayers spend unnecessarily subsidizing old, uncompetitive power plants is a dollar not spent building the clean energy economy of the future. 

Illinois ratepayers are already paying unnessarily higher prices to prop up Exelon’s old uncompetitive power plants. Two wrongs do not make a right. We encourage the General Assembly to reject this ill-timed, unjustified proposal.

Again, thank you for the opportunity to submit written testimony in opposition to Senate Bill 2250 / House Bill 4141.