Will Ameren's Legislative Sweetheart Deal Hurt Ratepayers?
Ameren received a legislative deal for exclusive rights to build new transmission lines.
NOTE: This story was originally posted for subscribers only. To receive subscriber-only newsletters and content, click here.
A hastily introduced, debated, and passed bill allowing downstate energy providers Ameren and Mid-American Energy exclusive rights to build transmission lines has been criticized by environmentalists and consumer advocates alike, but proponents say the legislation will help speed up the timeline for utilities to bring energy into the state.
The bill, passed by the House and Senate in the final days of the legislative session, gives the utilities the “right of first refusal” to build transmission lines in their territories, cutting out the possibility of competition in a free market.
The pro-consumer Citizens Utility Board opposed the measure. In a statement last week, the organization claimed Ameren would be able to charge consumers higher prices.
“[Ameren] would get first dibs on these big, interstate wire projects–at potentially higher, more lucrative prices for Ameren,” the statement read. “Not having a competitive bidding process would threaten higher costs for Ameren electric customers, as they ultimately will cover the costs of such projects on their power bills.”
We had numerous conversations with leaders in the energy transmission space, and we told competition “hasn’t worked” in the transmission space, leaving more burden on the shoulders of existing transmission companies to have the infrastructure necessary to meet needs of consumers.
“Ameren will get them done faster, and that will mean positive benefits for Illinois,” and industry insider told us.
But environmentalists remain concerned.
In a message to supporters last week, the Illinois Environmental Council criticized the legislation, saying it could “be costly and time-consuming, further delaying clean energy adoption downstate.”
Eric Dearmont, Director and Assistant General Counsel for Ameren Services Company said in a statement the projects will be competitively bid, will help local economies, and increase supply more quickly than a developer could.
"We support the solution by Illinois labor leaders and their membership to open new pathways to bring reliable, affordable energy to Downstate Illinois. Building regional transmission projects with experienced local workers, competitively bid and managed by trusted local energy companies, will accelerate the clean energy transition and deliver economic benefits as quickly as possible."
We’re also told the lines will improve import and export capabilities, meaning as wind and solar projects go online in Illinois in future years, the lines will provide cheaper, easier access for green energy to get to the power grid.
No matter who builds the transmission lines, eminent domain is potentially the next great battle for Ameren, or whoever builds the lines, as they will likely receive eminent domain powers, and pushback from land owners, as they try to move projects forward.