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player ready...Electric bills are a sore spot with consumers and for good reason.
They would be set to go quite a bit higher in the next few years but for an artificial cap the regional power-grid manager serving Commonwealth Edison’s territory and all or parts of 12 other states has imposed on the price paid to power generators for promising to deliver when most needed. That cost, reflected in the electric bills all of us pay, is established via an auction held ahead of time by PJM Interconnection, operator of this regional grid that includes northern Illinois.
PJM (one of several U.S. regional grid overseers that reports to the Federal Energy Regulatory Commission) ran its auction just last month for the delivery year beginning June 1, 2028, and ending May 31, 2029. And the results delivered a stark — but largely unnoticed — warning for the Chicago area.
The cost of “capacity” in the period was capped at $325 per megawatt-day, about the same as ratepayers are charged now. But, based on the bids PJM got from generators and other providers, if there had been no price cap, the capacity charge just in the ComEd territory would have been more than double at nearly $777 per megawatt-day, far higher than any such price ever recorded by PJM.
In every other part of the PJM footprint, which runs east from here to the mid-Atlantic, the cost would have been higher without a cap as well. But it “only” would have been about $555 per megawatt-day.
If that price in the ComEd territory had been allowed to stand, monthly electric bills for residents of single-family homes would be increasing $35 to $77 beginning in mid-2028 for that reason alone, according to ComEd. Those in apartments would be paying $17 to $38 more.
You may be wondering why you should care if regulators and politicians have worked to keep such disastrous outcomes from occurring. The reason, as we’ll explain further below, is that price controls of this sort reduce supply and risk future shortages. In other words, which is worse? Nosebleed electricity prices or rolling blackouts when temperatures soar?
That said, why is northern Illinois such an outlier? PJM didn’t say in their auction release. But Joseph Bowring, the independent market monitor for the PJM region (he serves as sort of a referee for the market, assessing bidder behavior and other things), wasn’t so reticent. He told RTO Insider, a trade publication, that the state’s clean-energy law, the 2021 Climate & Equitable Jobs Act, is responsible.
The law’s 2045 deadline for virtually all fossil-fuel generators to shut down makes the cost of building new natural gas-fired plants higher than elsewhere in PJM, and that’s reflected in the capacity prices, he said. The capacity market is meant to send price signals to developers, incentivizing them to build new plants in order to meet higher demand or compensate for older plants that are closing.
In Illinois, thanks to CEJA, existing plants are encouraged to close even as the construction of new fossil fuel plants is discouraged. Given the way PJM manages its auction, the wind farms and solar facilities that are meant to make up the difference in Illinois are given less credit than nuclear or fossil fuels for being able to produce when need is greatest since they aren’t always available depending on weather conditions.
So this state suffers a market penalty due to clean-energy policies that are more aggressive than every other state in the PJM footprint.
That’s not the end of the bad news for northern Illinois in PJM’s latest capacity auction. Despite having the largest fleet of nuclear power plants in the country, we now don’t produce enough power to meet peak demand within our borders. So we must import that electricity — primarily derived from the carbon-emitting fossil fuels our policies are meant to phase out — from neighboring states when consumption is high.
This is a new phenomenon. For decades, the ComEd territory produced far more electricity than it needed, keeping power prices low and ensuring the lights stayed on during heat waves and polar vortexes. But plant closures due in part to CEJA are substantially reducing capacity in our region.
In the 2028-29 capacity auction, 20,919 megawatts cleared and will have to produce in that year when called upon. Peak demand now is about 22,000 megawatts, according to ComEd.
As recently as the comparable 2024-25 period, 25,152 megawatts of power in ComEd territory were committed to deliver per the PJM process — well above peak demand.
Indeed, throughout the multistate PJM region, the power-grid manager isn’t procuring enough promises to deliver during future heat waves and cold snaps to meet its minimum requirements. The artificial ceiling on capacity prices, a compromise forged with governors throughout the footprint including Illinois’ JB Pritzker, is keeping a lid on electric bills but only at the risk of future shortages.
We’ve written before about the need to adjust CEJA, a well-intentioned law that has run up against abrupt market changes since its enactment driven by demand from power-hungry data centers. Pritzker and Springfield Democrats amended the statute last year to give state regulators flexibility to allow gas-fired plants that otherwise would have to shut down by 2030 more time to run if they’re needed — changes we applauded.
But that’s not enough in our view. Springfield needs to respond more forcefully to the alarm bells markets are sending.
As of now, too many Illinois power plant owners are facing needless uncertainty. They must determine whether to invest to keep their plants running, and for now they’re at the mercy of short-term decisions made by state and federal bureaucrats. They have opportunities to invest in other states without these impediments. Whether Illinois Democrats like it or not, we don’t live on an electricity island.
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Amending Illinois’ law to allow affected gas-fired plants to run at least another five years past the 2030 deadline would send an important signal to the industry and help get the state through a period of potential crisis.
Submit a letter, of no more than 400 words, to the editor here or email [email protected].