Byron, USA: The Exelon Byron nuclear power plants operate at full capacity on May 14, 2007 in Byron, Illinois. (Photo must be by JEFF HAYNES/AFP via Getty Images)
JEFF HAYNES | AFP | Getty Images
Nuclear energy pays off in times of fluctuating energy prices.
In September, Illinois legislators passed a groundbreaking clean energy bill that put the state at the forefront of its decarbonization efforts. One of the key provisions of the law was the obligation to keep the existing fleet of nuclear power plants in working condition, even if the plants were not profitable.
Nuclear reactors produce energy without greenhouse gas emissions, but they often cannot compete when other forms of energy such as natural gas and renewables become very cheap. But Illinois needed to keep its nuclear fleet running to meet its clean energy goals.
Now, less than a year later, upstate and Chicago utility customers are saving an average of $237 a year on their energy bills thanks to this legislation, according to state regulators.
In late April, Illinois-based Commonwealth Edison utility filed documentation with Illinois State Trade Commissionthe local regulatory agency, saying it will provide a credit of 3.087 cents per kilowatt hour starting June 1 to May 31, 2023.
The exact amount of the loan varies depending on how much energy the customer uses, but according to the Illinois Commerce Commission, on average, a loan means a savings of $19.71 per month, or an average of $237 per year.
The Illinois Clean Energy Act agreed to keep nuclear plants open if they were losing money, but it also limited the amount of money the nuclear plant owner, Constellation Energy, could make if energy prices rose. (In February, Exelon transferred part of its business to Constellation Energy.)
Energy prices have risen in part because of the Russian invasion of Ukraine and subsequent global efforts to phase out Russian energy pipelines.
“The Climate and Equal Jobs Act, passed last year, is working exactly as intended, keeping these critical zero-carbon energy facilities operating during periods of historically low prices, while protecting consumers when energy prices soar,” for they have recently led to sad world events. Constellation Energy made the announcement to CNBC in a written statement on Wednesday.
“To date, Illinois consumers have not paid a single penny to nuclear plants in accordance with the law, but instead will receive a substantial loan,” Constellation Energy said in a statement.
“I am proud that our commitment to go carbon-free by 2045 is already generating savings for consumers just months after the law goes into effect,” Governor JB Pritzker said in a written statement at the time.
The flip side of the Illinois legislation is that if energy prices fall again and Illinois’ existing nuclear fleet becomes unprofitable, Illinois will pay to keep the plants open so the state can continue to meet its decarbonization goals.
But right now, when energy prices are high, ComEd energy customers in Illinois are getting their money back.
Timing is very important because high inflation in the United States has a negative impact on consumers.
“For families struggling with the high cost of inflation, this is a welcome relief. What could have been a nuclear subsidy has been cleverly turned into a billion dollar bonanza for Illinois consumers.” Illinois Clean Jobs Coalition (ICJC)joint group Illinois organizations“, the written statement said. “The deal demonstrates the wisdom of Illinois’ approach to combating the climate crisis and creating well-paying and fair clean energy jobs while saving money for consumers.”
The loan will not affect all utility customers in Illinois. Utility Customers Amerenprimarily in central and southern Illinois, will not receive an energy credit because Ameren was exempt from the law because it serves fewer than 3 million customers.