Recent Exelon/ComEd Legislation Subject of Two Court Challenges

Two lawsuits have been filed as a result of state legislation passed in December of 2016. Illinois Public Act 099-0906, became law with the passage of Senate Bill 2814 after intense lobbying by Exelon and ComEd as a means to bailout two underperforming nuclear plants by providing so-called “zero-emission credits” or ZECs.

While other provisions of the law restructures certain aspects of the state’s energy efficiency programs and call for increased reliance on energy from renewable sources, such as wind and solar power, the law is drafted in such a way that the ZECs are available only to certain nuclear-fueled generating facilities, namely the Quad Cities and Clinton power plants owned and operated by Exelon.

The plaintiffs in the two suits include a group representing Illinois household and business electricity customers and another which includes an electricity generation trade association as well as some of Exelon’s power generation competitors. Each filed separate complaints in the U.S. District Court for the Northern District of Illinois in Chicago, seeking to invalidate the portions of the Illinois law they say oversteps the state’s constitutional bounds and provides Exelon with an unfair competitive advantage.

Both lawsuits are asking the court to block the ZEC provision from taking effect on June 1, and to declare the law unconstitutional.

While BOMA/Chicago is not a named plaintiff in either of the suits, it is closely monitoring the legal action. BOMA/Chicago, along with other groups including AARP, the BEST Coalition, and the Illinois Attorney General’s Office, were actively opposing the proposed law as it moved through the General Assembly last December. When proponents failed to muster enough votes to pass Senate Bill 2814, they sought an amendment to delay the effective date which lowered the number of votes needed in each Chamber to pass the legislation. The bill was subsequently voted out and signed by Governor Rauner despite the projected $12.9 billion impact it would have on Illinois ratepayers.

A BOMA/Chicago commissioned analysis of Public Act99-0906 determined that BOMA/Chicago members and member building tenants would realize net cost increases for electricity of $380.7 million between 2017 and 2045, with $58.7 million attributable to the ZEC provisions over the next ten years.