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4-Traders Homepage  >  Equities  >  Nyse  >  Exelon Corporation    EXC

Delayed Quote. Delayed  - 05/31 10:01:06 pm
34.27 USD   -0.17%
05/31 EDITORIAL : Pro-nuclear power, but this bill still a work in progres..
05/30 EXELON : Ameren backs Exelon bill after changes to energy efficiency..
05/30 EXELON : Nuclear plants need boost to stay open, industry warns
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EDITORIAL: Pro-nuclear power, but this bill still a work in progress

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05/31/2016 | 03:21am CEST

May 31--Budget deliberations have sucked all the air out of the Capitol of late, but there are a few other issues that Illinoisans need to be paying attention to as this legislative session winds down today.

Case in point is Senate Bill 1585, which would amend the state's Public Utilities Act to subsidize Exelon to keep its nuclear power plants open in nearby Clinton and the Quad Cities. Natural gas and other energy sources have pushed down the price of electricity, which has made nuclear power less profitable or not at all. The bill would allow Exelon to pass the tab onto consumers if also save thousands of jobs that are critical to the economies and tax bases of the communities in which they reside.

We are sensitive to the potential for job loss, which is why we oppose the legislation as is. Keystone Steel & Wire, which employs 1,000 here in the Peoria area and is among the last of its kind in the United States, has objected to the $1.1 million cost to its bottom line and the degree to which it imperils its workforce. The bill "threatens to put us at a competitive disadvantage in a fragile economy," Keystone Vice President Mark Brachbill testified before a legislative committee earlier this month. "These cost increases will not be realized by neighboring states or our international competitors, which will make passing along the increased costs impossible in the current business climate."

Meanwhile, the Illinois Attorney General's Office opposes the current legislation, as does the Citizens Utility Board (CUB), the consumer watchdog group. Among the concerns is that there are not enough consumer protections, especially if prices rebound for the utility. Meanwhile, they think there is still time to explore better, perhaps market-based solutions to keep those plants open. Exelon seems to think not, saying "the capacity market alone can't preserve zero-carbon emitting nuclear plants that are facing the lowest wholesale energy prices in 15 years." We'd still prefer that all other options be exhausted first.

For its part, CUB acknowledges that the threat of plant closure is real, that this is a better bill than previous efforts -- last year's version would have sent $300 million annually Exelon's way whether the plants were profitable or not, this year's about half that -- that it's important to keep this more environmentally friendly, reliable energy source around. Nonetheless, "there is still significant work to be done relating to consumer protections, the role of Ameren, ensuring that there is a full and functional Renewable Portfolio Standard, and giving customers the tools to better manage their energy use ... This is a step forward, but we're not there yet."

Philosophically speaking, we've never been terribly keen on government bailouts of single companies at the expense of their customers. That said, sometimes those are necessary, more plus than minus for their communities and the state as a whole, as arguably it was for Keystone itself back in 2001 when the state came to the rescue with a $10 million loan. As always, competing interests must be balanced. We agree with the Attorney General, CUB, Keystone and other manufacturers that there's still room to do that here.

___

(c)2016 the Journal Star (Peoria, Ill.)

Visit the Journal Star (Peoria, Ill.) at www.PJStar.com

Distributed by Tribune Content Agency, LLC.

© Tribune Content Agency, source Regional News

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