The Illinois subsidiaries of Vistra Energy operate power plants that generate 5,500 MW or 40 percent of the summer electricity capacity in Illinois’ downstate MISO Zone 4 market.

Without market reforms, implementation of environmental regulatory changes, and legislative relief this session, as much as 75 percent of these plants are at risk of immediate closure. The Illinois Coal to Solar and Energy Storage Act (HB 2713 / Amendment 4 to SB 2080) establishes a reasonable, affordable, and achievable transition plan for downstate generation that works within preestablished rate-caps.

NEW UTILITY-SCALE SOLAR AND ENERGY STORAGE AT COAL PLANTS

The Act proposes to reuse the substantial transmission infrastructure and available land at existing coal-fueled power plants by reinvesting and transforming the plants through the development of approximately 500 MW of utility-scale solar and battery energy storage. To accelerate this development, the Illinois Power Agency (IPA) will award 15-year contracts to existing plant owners to provide an aggregate amount of 800,000 to 1,000,000 Renewable Energy Credits (RECs) per year, priced at $35 per REC. The new utility-scale solar and energy storage facilities at existing coal plants will range between 20 MW and 100 MW, and the renewable generation must come online between 2021 and 2022.

Energy Storage Grant Program

The IPA will provide up to $66 million in grants over 10 years to construct stand-alone four-hour energy storage facilities with a capacity of 40 MW to 80 MW at existing coal plant sites that do not have sufficient suitable land to construct utility-scale solar generation of cost-effective scale. This will enhance grid resiliency and reliability and will preserve, to the extent possible, local property taxes. The standalone energy storage sites must come online no later than January 1, 2024.

Generation Capacity Retained Through 2024

To prevent a spate of downstate plant closures that would substantially reduce Illinois’ available in-state generation capacity for the next several years, the IPA will offer transitional assistance to existing downstate power plants that are at risk of imminent closure. To be eligible, the plant must have a capacity of at least 150 MW, burned coal as its primary fuel source, and be located south of Interstate 80. The plants will receive grants of up to $150 per MW-day of capacity for the year, a rate lower than the average recent clearing price in the state’s northern PJM market. The total transitionary assistance is capped at $140 million annually, and energy storage grants are deducted from this annual amount. Absent an unforeseen capital expenditure more than of $10 million, and as a condition of accepting transition assistance, the at-risk plant must remain in operation through 2024, and the coal-fueled generation at the site must retire between 2025 and 2030.

Transition Assistance Tied to Emission Reductions

To ensure a transition to a more renewable footprint with fewer emissions, transition assistance is only available if the owner of the plant has been selected to develop and deploy utility-scale solar and energy storage, with the new renewable energy coming online between 2021 and 2022. Development of new renewable resources carries the commitment that for each new megawatt of renewable energy, five times as much coal-fueled generation must be retired in the fleet no later than 2030, and by 2030 the statewide fleet’s CO2  emissions will be 75 percent lower than its 2005 statewide levels.

Coal to Solar and Energy Storage Initiative Charge:

These programs will be funded through a new statewide add-on charge to delivery service customers. Any collections of the charge not needed for funding of the programs will be refunded to customers.

Price Predictability Over Next Five Years:

The add-on charge to delivery service customers is $0.1333 cents/kWh for the first five years of the program. It is projected that an average monthly residential bill would increase $0.92 – $1.33, with a typical residential consumer experiencing a $1.13 monthly charge for the program.

Utility Scale-Solar and Energy Storage:

The add-on charge to delivery service customers drops to $0.030 cents/kWh beginning in 2025 for the remaining term of the Renewable Energy Credit contract. A typical residential consumer would experience a $0.25 per month charge during this period.

The Illinois Coal to Solar Act of 2019 (HB 2713/Amendment 4 to SB 2080) has been introduced in the Illinois General Assembly. You can review the status of the legislation by clicking here.