Published: December 9, 2021 |

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The Illinois Commerce Commission on December 2 approved the first ever procurement of carbon mitigation credits (CMCs), created when the state recently overhauled its energy policies.

Winning bids went to the 2,389MW Braidwood station, the 2,500MW Byron plant, and the 1,800MW Dresden facility, all of which are owned by Chicago-based utility Exelon. The credit delivery period will run from June 1, 2022 to May 31, 2027, with the state awarding roughly 54.5mn CMCs/yr.

The program is funded by a surcharge leveled on bills of Exelon subsidiary Commonwealth Edison’s customers.

The Illinois Power Agency (IPA), which handles both CMCs and renewable energy certificates (RECs) on behalf of the state, held the actual procurement on November 23.

Illinois limits the maximum bid price that nuclear facilities could submit to the IPA procurement to protect ratepayers from escalating costs. The ceiling begins at $30.30/MWh during the 2022-23 delivery year and rises over the course of the procurement window, maxing out at $34.50/MWh during the 2026-27 delivery year.

The CMCs, which are tradeable, represent the environmental benefits of the zero-emissions nuclear power plants. The actual value of the credits can vary from month to month, as the state subtracts factors like indexed energy prices and federal subsidies from the baseline value of the bids. As a consequence, the payments to winning facilities will reflect market conditions, and could result in a credit to ratepayers if market revenues exceed the baseline cost cap.

Governor JB Pritzker (D) and state lawmakers included the CMC program in a sweeping clean energy bill enacted in September after Exelon warned it would close the Byron and Dresden stations this year without legislative support.

Nuclear provides around 58 percent of Illinois’ generation and most of its carbon-free power. Without that electricity in the mix, lawmakers feared the state would be unable to lift its clean energy target to 100 percent by 2050.

The CMC incentive ends in 2028.

Illinois also has a separate zero-emissions certificate program to help keep other nuclear plants on line, having awarded contracts to Exelon’s Quad Cities and Clinton stations.

IPA also is working on a new, long-term procurement plan to help the state meet its renewable portfolio standard, which now peaks at 50 percent of the state’s electricity by 2040.

Source: World Energy

About Exelon Corporation
Exelon Corporation is a Fortune 100 energy company with the largest number of electricity and natural gas customers in the U.S. Exelon does business in 48 states, the District of Columbia and Canada and had 2019 revenue of $34 billion. Exelon serves approximately 10 million customers in Delaware, the District of Columbia, Illinois, Maryland, New Jersey and Pennsylvania through its Atlantic City Electric, BGE, ComEd, Delmarva Power, PECO and Pepco subsidiaries. Exelon is one of the largest competitive U.S. power generators, with more than 31,000 megawatts of nuclear, gas, wind, solar and hydroelectric generating capacity comprising one of the nation’s cleanest and lowest-cost power generation fleets. The company’s Constellation business unit provides energy products and services to approximately 2 million residential, public sector and business customers, including three fourths of the Fortune 100.

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