What led up to Harmon's threatening letter to energy retailers.

Exelon likes his plan. Why don't they?

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By Jim Bowman

Writer

According to Sen. Don Harmon's proposal meant to push ahead a stalled clean-energy solution, little guys will pay more for Illinois' windmills, as this blog noted yesterday, and as was made clear in this Oct. 24 piece by Steve Daniels in Crain's Chicago Business:

The [proposed amendment to a 2007 law] outlines a potentially controversial financing mechanism requiring the bulk of the money to be spent on clean-power projects to come from power suppliers serving households and small businesses.

Exelon and other companies that mainly provide electricity to midsized and large commercial customers would get a significant break . . . .

So would wind-farm owners whom the state owes money on their power-purchase contracts "because of unforeseen wrinkles" in the [2007] law.

Harmon wanted to start movement on the matter Nov. 5, but the smaller retailers blocked it, and Harmon responded in a hard-nosed letter, blogged about yesterday. Note the urgency here, as opposed to pension-reform dawdling -- a bottleneck that gets to the heart of the state's fiscal health.

Exelon and environmentalists liked this version. So did the city of Chicago. But other suppliers said it cuts into "razor-thin" profit margins and forces price raising. Later, as we know, they took action, tossing the monkey wrench into Don Harmon's efforts and eliciting biting comments from him in a letter.

Clean power is the issue. The 2007 law says Illinois is to be 25% clean by 2005. But what Crain's calls "dramatic changes in the energy marketplace" stymied that enterprise, throttling the purchase of windmills etc. Hence Harmon's reference in his Nov. 4 letter to market "vagaries."

What happened was mass migration by consumers from Exelon's Com Ed to retail newcomers who charge less for the same service, thwarting a crucial, newly hatched state agency intended to buy and install windmills etc.

This is the Illinois Power Agency (IPA), which was to be for clean energy what ObamaCare exchanges are supposed to be for health care, namely a buyer and seller or marketer of the key product, in this case fuel. IPA was to be the go-to clean-fuel store.

That was the plan. Then the market misbehaved, and the plan went awry, as best-laid ones do. The small retailers got the proposal tabled, saying they would have to raise prices. Harmon demanded they prove it.

Hey, small-customer suppliers, it's government calling. You better answer.

Contact:
Email: jimbowman7@aol.com Twitter: @BlitheSp

Reader Comments

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Jim Coughlin from Oak Park, Illinois  

Posted: November 14th, 2013 2:40 PM

Not sure that a 2007 law would have required Illinois to be 25% clean by 2005.

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