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October 11, 2018
STATE GOVERNMENT
ICC
The Illinois Commerce Commission has issued a Notice of Inquiry on electric vehicles (EV) to further solicit comments and perspectives on how EV's would impact grid resiliency and energy efficiency. The release notes that "regulatory uncertainty discourages utilities and customers from participating at a larger scale and questions remain on how to treat charging infrastructure from an ownership perspective, how to determine appropriate rate structures, and how to encourage efficient EV charging practices to support grid stability." The release notice is here. Comments are due Oct. 23rd and the Chamber plans to submit a response.
Statehouse
The House Public Utilities Committee will hold a hearing on October 15th on the U.S. EPA's Affordable Clean Energy Plan: State Plan. The Chamber will be testifying, along with Elevate Energy and the Illinois Environmental Council as the only know panelists thus far. Our message will focus on how Illinois can and should develop a robust stakeholder engagement process as it develops its state plan, the need for flexibility, recognizing the trend in greenhouse gas emission reductions based on market forces, and encouraging the state to work together. I have sent the draft testimony to our full members. If any members have any thoughts or concerns, please let me know.
We learned yesterday that the home rule taxation preemption under the Illinois Power Agency Act is set to sunset on January 1, 2019. This could
potentially open the door for home rule units to impose a tax on the generation of electricity, or emissions from that generation of electricity, unless extended. It would seemingly apply to any generation regardless of fuel type or ownership. The provision is here.
FEDERAL GOVERNMENT
Back in June, FERC declared the PJM capacity market "unjust and unreasonable" as designed because its existing market rules did not account for the effect of subsidies in competitive markets. State decisions to sponsor efforts to support certain energy resources is sparking possible changes to how these competitive marketplaces operate. FERC's directive was to issue a proposal that recognizes state authority while guaranteeing that price outcomes for all generation types - including those not receiving support - remain fair and competitive. In response, PJM has issued a new proposal that would remove state-subsidized resources from the capacity market and declare a strict price floor for the resources that remain. PJM would allow the "blocked" resources to enter into the Resource Carve-Out (RCO) and obtain a capacity commitment without having to bid in the capacity auction. The second piece of PJM's proposal would establish the Extended RCO, which would raise prices for the resources that remain in the market. PJM would recalculate capacity prices by removing carved-out resources from its supply, but still factoring in market demand they serve. The full proposal is here and reply filings are due November 6th. FERC will likely rule in January.
In the meantime, ICC Chairman Brien Sheahan wrote an op-ed in Utility Dive last week suggesting Illinois could leave the PJM market if the RTO does not accommodate the state's energy initiatives. In the piece, Sheahan suggests those in the PJM footprint could consider joining a neighboring RTO or have the state take on managing market functions. I expect to see activity in the General Assembly on this issue.
Upcoming Illinois Commerce Commission Policy Sessions
The ICC, mainly Acting Commissioner Anastasia Palivos, is active with policy sessions. See below for the upcoming list.
October 10th - Wind Energy Policy - Yesterday
Being hosted today at 1pm, the ICC will examine issues for wind energy in connecting to the grid; the economics of the wind industry, how many has wind impacted energy costs and what its contribution is to Illinois' economy; and the legal and policy considerations to increase wind energy usage in the state.
October 25th - Smart Apps for Utility Operations
The session will discuss recent mobile app innovations in the utility world and how it may help customers understand and use energy more efficiently. The event is from 1pm-3pm.
November 26 - Gas Pipeline Infrastructure and Safety
Announced yesterday, this session will "discuss current gas pipeline system design attributes and the associated challenges of maintaining and repairing gas pipeline systems. The event will also examine methods of modernization, subsurface challenges, and relay the importance of coordination with utilities and agencies in creating the gas distribution system of the future." It is hosted from 1pm-4pm.
Illinois, Missouri Chambers Host Critical Infrastructure Conference in St. Louis
Thank you to all of the sponsors, speakers, and attendees that made last week's 2018 Critical Infrastructure Conference a resounding success. This is the second year we have co-hosted this event with the Missouri Chamber of Commerce & Industry and are already looking to see if we can grow on it even more in 2019.
A big thank you to the Terminal Railroad Association of St. Louis for hosting us the night before on a rail tour of the Metro East/St. Louis region. Attendees got a chance to engage with speakers and special guests ranging from Congressional and White House staff to state legislators.
Our keynote speakers of Alex Hergott, President Trump's infrastructure advisor, and Canadian Consulate General John Cruickshank were incredibly engaging. A big thank you to member Cypress Creek Renewables for participating in our energy supply chain panel with the U.S. Chamber of Commerce and Missouri Enterprise. Our other panelists and speakers brought fantastic insight to critical infrastructure. Discussions ranged from the need to invest in infrastructure, changing how we approach investment, and how to prepare for an ever-changing environment.
Thank you again to everyone who supported this event. It would not have been a success without you.
ARTICLES OF INTEREST
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