Illinois climate law meant to aid nuclear plants now cutting electric bills instead

A law originally enacted to keep the state’s nuclear fleet profitable is instead giving relief to energy customers due to rising power costs and increased federal subsidies for nuclear generators.

ComEd customers in Illinois will see an average $19 monthly reduction to their electricity bills over the coming months, thanks to a policy in the state’s landmark climate bill.

At the time negotiations were underway for the 2021 Climate and Equitable Jobs Act, then-nuclear operator Exelon Corporation informed policymakers that it could not continue operating three of the state’s six nuclear stations profitably amid low energy prices. Rather than operate at a loss, Exelon would have closed the plants.

Closure would have been a major roadblock to Gov. JB Pritzker’s goals for a carbon-free future and resulted in significant energy shortfalls, creating reliability concerns and higher prices.

To avoid a crisis, lawmakers struck a deal.

Ratepayer bills were to include a small monthly surcharge to support the purchase of Carbon Mitigation Credits, or CMCs, to subsidize nuclear plants. The deal offered Exelon, now Constellation, the security of reliable income to meet its costs, while ensuring reliable carbon-free energy delivery for northern Illinoisans.

But it also imposed a ceiling. When the company’s revenues exceed a set threshold, either via federal subsidies or due to higher market prices, the excess flows back to ComEd customers.

And as energy market prices have surged over the past few years, it turns out northern Illinois’ nuke plants haven’t needed the state’s help.

Instead, the program has provided a net benefit to ratepayers exceeding $1.8 billion since 2022, as ratepayers contributed $795 million to keep nuclear plants running but saw over $2.6 billion flow back to them.

The initiative has saved ComEd’s 3.8 million residential customers an average of $177 since it commenced, according to the Illinois Power Agency, which oversees procurement of the credits.

The deal was not about giving a “free lunch” to the nuclear plant operators, according to state Rep. Ann Williams, a Chicago Democrat, but about supporting the grid in a “responsible and equitable” way.

‘Affordability being prioritized’

IPA Director Brian Granahan described the credits as the outcome of successful public policy, thanks to lawmakers working with nuclear plant operators.

ComEd customers receive electricity from the PJM Interconnection, the largest regional transmission organization in the nation. But as data center demand drives up energy rates for customers across the PJM region, it increases the price of energy. The price per megawatt-day at the December PJM capacity auction, for example, hit a record of $333.44 for 2027-28, 11.5 times higher than just three years prior.

While bills still rise, the CMC initiative partially offsets that cost for Illinois customers.

“We’re seeing something in Illinois that other states in the PJM region may not be seeing, in affordability being prioritized through this crediting coming through,” Granahan said. “Formed out of CEJA, the program has meaningfully supported clean energy in Illinois while insulating ratepayers from price spikes.”

ComEd customers have already seen higher than usual benefits this year, with over $580 million credited back on energy bills in the first two months of the year alone, according to the IPA.