Dynegy pushes bill to get all of Illinois into the PJM market

Due to what it sees as flaws in the Midcontinent ISO markets, Dynegy Inc. (NYSE: DYN) said May 26 that it plans to back the Illinois Generation Reliability Act, which would put MISO’s portion of Illinois into the PJM Interconnection region, at the Illinois Legislature.

The ultimate goal of the Illinois Electric Generation Reliability Act is to move all of Illinois, including the Commonwealth Edison (ComEd) and Ameren Illinois service areas, into the PJM market. Currently, Illinois is divided into two separate power markets with northern Illinois participating in the competitive PJM market while central and southern Illinois are in MISO, a hybrid power market designed to benefit traditional utilities in the surrounding states, Dynegy said. Upon integration of central and southern Illinois into PJM, the long-term beneficiaries will be Illinois consumers and the state’s economy, the company added.

Dynegy said the results from the most recent MISO and PJM capacity auctions clearly illustrate the problem: capacity prices (the amount generators are paid to be ready to run) in northern Illinois are nearly three times that of southern Illinois due to less economic plants in the north, while more cost effective plants in southern Illinois sit idle, or shut down, as they don’t receive any compensation to cover operating costs from MISO.

“The results from the PJM auction are a valuable and important indication that combining all of Illinois into PJM through the Illinois Electric Generation Reliability Act will be beneficial for the entire state,” said Robert C. Flexon, president and CEO of Dynegy. “Illinois legislators have a great opportunity to take control of an issue that is debilitating communities across the state while at the same time bring lower power prices to consumers through a more efficient market design that can exist throughout the state.”

Illinois legislators and labor leaders support the legislation and some offered the following comments.

  • Senate Majority Leader, James Clayborne – “As the results of the most recent PJM and MISO capacity auctions demonstrate, there is a huge gap between how generators in northern Illinois and those in southern Illinois are compensated. This is leading to the shutdown of generation in southern Illinois, which is threatening electric reliability, jobs, taxes and related economic development. This legislation is designed to address this gap, level the playing field, and ensure electric generation reliability, jobs, and the economy are protected. We have heard from other energy policy stakeholders as to their needs but we must ensure that any Illinois energy policy is comprehensive and includes downstate Illinois.”
  • Steve Hughart IBEW 702 Business Manager – “The bill protects consumers from the high scarcity pricing that will result if out of state utilities, that are already highly compensated through utility commission approved rates in their home states, are allowed to unfairly underbid into the Illinois market and force Illinois’ competitive generators to shut down plants. The IBEW stands ready to work with the General Assembly, Dynegy, and other stakeholders on this permanent solution and on an interim solution to protect downstate generation, jobs, and reliability while we transition to PJM.”

In Illinois, Dynegy has 13 power stations serving more than 800,000 retail customers and employing nearly 1,400 people.

  • Its Illinois power plants in MISO, all coal-fired, are: Baldwin Energy Complex, Baldwin, IL; Havana Power Station, Havana, IL; Hennepin Power Station, Hennepin, IL; Wood River Power Station, Alton, IL; Coffeen Power Station, Coffeen, IL; Duck Creek Power Station, Canton, IL; Edwards Power Station, Bartonsville, IL; Joppa Power Station, Joppa, IL; and Newton Power Station, Newton, IL.
  • Its PJM plants in Illinois are: Elwood Energy Facility, Elwood, IL; Kendall Energy Facility, Minooka, IL; Kincaid Power Station, Kincaid, IL; and Lee Energy Facility, Dixon, IL.
About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.