A controversial proposal that would grant electric utilities more control over the construction of transmission lines is being revived in Springfield.
Rep. Larry Walsh, D-Elwood, who chairs the Public Utilities Committee in the Illinois House, was behind a push last year that would have granted a temporary “right of first refusal” to Ameren Illinois and MidAmerican Energy. A ROFR policy would grant existing utilities the option of controlling transmission line projects before other companies can bid on them.
But Gov. JB Pritzker vetoed that measure last summer, saying the proposal would hurt ratepayers, and its sponsors declined to bring it for an override vote when lawmakers returned to Springfield for their annual fall veto session.
Read more: Proponents drop push to give downstate utilities dibs on new transmission lines
Now, Walsh is advocating for a new proposal that would grant a permanent right of first refusal to all existing electric utilities in the state. Like its predecessor, the measure is backed by the unions that represent the construction and electrical workers who handle these types of projects.
Walsh has collected more than $500,000 in campaign cash from organized labor-affiliated groups in the past 10 years and $49,500 from Ameren Illinois – including $8,000 in the past year.
On Tuesday, Walsh’s committee held a subject matter hearing to discuss a potential right of first refusal in Illinois. While no vote was taken, representatives of the energy sector and consumer advocates testified to lawmakers.
Corey Stone, assistant business manager at IBEW Local 51, told the committee that implementing a ROFR has been a priority for IBEW’s international organization since 2011, when the Federal Energy Regulatory Commission issued “Order 1000,” which instituted a competitive bidding process for transmission line projects.
Walsh said he convened the hearing in response to criticisms he received last year that the previous version of the policy – introduced and passed in the final days of the spring legislative session in May – was rushed through without sufficient study.
“The testimony was clear: ROFR will get these new lines in service faster and keep the economic benefits here at home for Illinois consumers,” Ameren spokesperson Tucker Kennedy told Capitol News Illinois in a statement.
Others said the right of first refusal proposal could protect contractor diversity requirements that Illinois utilities must abide by.
“There’s no guarantee that out-of-state developers will meet the diversity commitment that Illinois utilities have not only embraced but are achieving,” Stephanie Hickman, CEO of Trice Construction Company, told lawmakers. “It’s probable to say they won’t. There’s no apparent mechanism in place to establish this expectation.”
Last year, environmental and consumer advocates strongly opposed ROFR, contributing to pushback both in the legislature and from the governor.
Jack Darin, head of the Illinois chapter of the Sierra Club, has been outspoken against the policy. At Tuesday’s hearing, he said while he was in “substantial agreement” with proponents of the new proposal regarding transmission line goals, his opposition stemmed on the overall approach to utility regulation.
“We certainly agree that we definitely need more investment in our transmission grid in Illinois,” he said. “We need more investment to have our grid be reliable and safe.”
But Darin said he disagrees with proponents’ claims that ROFR would lower costs.
“We do believe that competition in this part of the energy sector, just like we have competition in our energy supply economy, could result in energy savings, lower bills for customers and therefore resources for other investments we need to make,” he added.
Consumer advocacy groups like Citizens Utility Board and AARP Illinois, along with the Natural Resources Defense Council, all opposed the bill on Tuesday, citing similar concerns about consumer impacts. William Malcom of AARP Illinois also noted that federal regulators may render Illinois’ consideration on the matter moot.
“It’s premature for Illinois and other states to be too worried because the Federal Energy Regulatory Commission is already reviewing the policy,” he said Tuesday.
Tensions between the state and the energy sector
The push for ROFR could set up the next episode of tension between Illinois’ utility regulators and the state’s energy sector. Utilities, contractors and unions have all sharply criticized the Illinois Commerce Commission in recent months following a series of bombshell decisions by members of the entirely Pritzker-appointed ICC. Those same decisions were lauded by consumer and environmental advocates.
Read more: Advocates hail regulatory ‘earthquake’ as state slashes requested gas rate increases | State regulators once again flex muscle in rejecting utilities’ grid plans, lessening rate hikes
The five-member board cut down requested rate increases across the board and rejected the multi-year grid plans from the state’s electric utilities – sending those plans back to the drawing board.
Chicago’s Peoples Gas was put on notice in November when, in addition to cutting back its rate increase request, the ICC launched an investigation into a controversial infrastructure spending program and paused all activities related to it.
This month, International Union of Operating Engineers Local 150, an influential labor group, launched a campaign to push back on the decision.
Local 150 President James Sweeney wrote that the decision was a “reckless and foolhardy act” in an address aimed at union members earlier this month.
Others have also connected the ICC decisions to negative effects, furthering the gap between the utility sector and state regulators.
Tom Burke, vice president of Edwardsville-based contractor J.F. Electric, told Capitol News Illinois that following the ICC’s decisions in the electric cases, his company laid off “110 workers out in the field and more than 10 people that do support.”
“It is direct,” Burke said. “Literally: an announcement came out, they notified us, we have to make changes now.”
Capitol News Illinois is a nonprofit, nonpartisan news service covering state government. It is distributed to hundreds of print and broadcast outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation, along with major contributions from the Illinois Broadcasters Foundation and Southern Illinois Editorial Association.
