Today Illinois has relatively reasonable electric rates mostly because there is excess generation capacity in the Illinois, regional and national electrical generation system.
The Illinois excess capacity is basically the result of having the nation’s largest fleet of nuclear generating stations and the fact that Illinois sits at the intersection of several major natural gas pipelines that provided the ideal locations for establishing natural gas generation facilities (mostly merchant plants, or non-utility owned).
Prior to electric deregulation in the US (it began in the 1990s), each of more than a thousand utility monopoly electric utilities across the US had to build and run sufficient electric capacity to serve their area’s “peak” electrical demand. For the most part, the monopoly utility transmission and distribution systems (the wires, big and small) were not connected to other utilities or regions. So each utility planned excess capacity that they might only need once or twice a year for a few hours when their system would “peak” in demand.
Demand peaks across the US DO NOT occur at the same time, but there was no system for sharing generation across states or regions. So nationally, in the 1990s, not only was each utility forced to build their own peak capacity, the industry was building to support what they believed was a growing national demand (growth at the time was forecast at around 2% annually, compounded).
During the late 1980s and early 1990s, in preparation for deregulation and to improve reliability of the system, the federal government began funding and requiring interconnection between monopoly utilities. It also established regional oversight of transmission systems by region. These changes facilitated the sharing of generation across states and regions and led better utilization of existing generation capacity.
Also, during the 1990s, the growth in electrical demand flagged and in some cases actually was reduced.
So excess generation capacity, regional sharing, and flagging demand has led to about 20 years of moderating electric prices in places like Illinois that enjoyed excess capacity.
Today, the current problems confronting us are:
- The aging of the nuclear generation fleet.
- The higher cost of operating the nuclear fleet as it ages.
- The increased (and subsidized) competition from “green” generation sources.
- The concerns around the CO2 emissions of both coal and natural gas generations.
- The capacity constraints of the existing interconnection system that ties the regions and the states together.
In answer to your first question, I believe Madigan’s maneuvers slowed the rate reductions that have occurred, and in some cases, Illinois legislation has established a price floor to protect Illinois based generation. So, no he doesn’t get credit for our current “reasonable” rates.
I think it is about time that legislators in Illinois spoke the truth to Madigan’s power. Although I expect the Speaker to refuse to address the committee, I hope they publicly air the questions we should all be asking about the corrupt involvement in the legislation surrounding electric policy in Illinois.
I am glad that the Governor has found his voice, but exactly what will he do if Madigan refuses to answer questions?
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Dennis gave me permission to ask you for a comment on this story – https://chicago.suntimes.com/politics/2020/9/9/21429805/mike-speaker-madigan-comed-investigation-committee-federal-court
We all know that energy costs are some of manufacturers most budget draining. Illinois is known as being “reasonable” on their power rates. Was that because of Madigan’s maneuvers?
What do you think about Republicans initiating this hearing, and of Pritzker now calling for answers from Madigan?
Would use your remarks in a story for TMANews and possibly Illinois Review.
Thanks for your consideration –
