Cash
strapped Illinois government has borrowed nearly all of the state’s alternative
energy supply investment fund, crippling future development of wind power in
the state. Established in 2010, the fund was opened in September 2010 with
initial cash of $7.1 million, and within a month $6.7 million was borrowed by
various state agencies to pay past due bills. Although the Illinois Power
Agency says the debt is being repaid, and it plans to use the repaid cash for
its intended purpose, renewable power developers are doubtful the fund’s
balance will become available to them with any certainty in the future.
By
current law, there is a 2025 deadline for Illinois to get 25% of its electric
power from renewable sources. However, changing conditions in the state’s
electric market are driving wind power developers away from the state. Houston
based EDP Renewables has closed its Bloomington office and, although that
company has invested $1.5 billion
Illinois wind farms, future wind power developments are now on hold. “We
need to be able to lock in long term contracts in order to sell our power,”
says EDP Senior Manager of Government and Regulatory Affairs Jeff Bishop. “Currently,
the way the renewable portfolio standard is structured, it makes it very
difficult for us to procure long term contracts.”
When
Commonwealth Edison signed its first long term wind power contracts in 2010,
Com Ed had 99 percent of residential customers in the Chicago region, but that
market share is rapidly diminishing under recent legislation permitting
municipal aggregation. Already 100 cities, villages and towns have moved their
residents to other power companies, and another 160 have passed measures which
will further erode the Com Ed market share. Com Ed predicts that by 2017 it
will have only 65% or so of the Chicago region market for residential power.
The
Illinois Power Agency, which procures energy on behalf of Illinois utility
companies, says this sort of market volatility makes it impossible to grant long
term contracts at stable prices for new wind power development. Chicago based
Invenergy’s Director of Origination Craig Gordon believes that the municipal
aggregation legislation jeopardized even those long term renewable power
contracts already in place. “We’ve seen a lot of these municipalities are
switching their suppliers … and what that does for folks who have long term
contracts, is put those contracts in jeopardy,” Gordon says.
Once
again, political meddling with long term power market forces in attempts to fix
short term problems has created a nightmare for the long term plans of
alternative energy developers, and the uncertainty is driving them out of our
state.
