Cashstrapped Illinois government has borrowed nearly all of the state’s alternativeenergy supply investment fund, crippling future development of wind power inthe state. Established in 2010, the fund was opened in September 2010 withinitial cash of $7.1 million, and within a month $6.7 million was borrowed byvarious state agencies to pay past due bills. Although the Illinois PowerAgency says the debt is being repaid, and it plans to use the repaid cash forits intended purpose, renewable power developers are doubtful the fund’sbalance will become available to them with any certainty in the future.
Bycurrent law, there is a 2025 deadline for Illinois to get 25% of its electricpower from renewable sources. However, changing conditions in the state’selectric market are driving wind power developers away from the state. Houstonbased EDP Renewables has closed its Bloomington office and, although thatcompany has invested $1.5 billion Illinois wind farms, future wind power developments are now on hold. “Weneed to be able to lock in long term contracts in order to sell our power,”says EDP Senior Manager of Government and Regulatory Affairs Jeff Bishop. “Currently,the way the renewable portfolio standard is structured, it makes it verydifficult for us to procure long term contracts.”
WhenCommonwealth Edison signed its first long term wind power contracts in 2010,Com Ed had 99 percent of residential customers in the Chicago region, but thatmarket share is rapidly diminishing under recent legislation permittingmunicipal aggregation. Already 100 cities, villages and towns have moved theirresidents to other power companies, and another 160 have passed measures whichwill further erode the Com Ed market share. Com Ed predicts that by 2017 itwill have only 65% or so of the Chicago region market for residential power.
TheIllinois Power Agency, which procures energy on behalf of Illinois utilitycompanies, says this sort of market volatility makes it impossible to grant longterm contracts at stable prices for new wind power development. Chicago basedInvenergy’s Director of Origination Craig Gordon believes that the municipalaggregation legislation jeopardized even those long term renewable powercontracts already in place. “We’ve seen a lot of these municipalities areswitching their suppliers … and what that does for folks who have long termcontracts, is put those contracts in jeopardy,” Gordon says.
Onceagain, political meddling with long term power market forces in attempts to fixshort term problems has created a nightmare for the long term plans ofalternative energy developers, and the uncertainty is driving them out of ourstate.
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