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Illinois AG concerned over electricity price jump

By: Jacob Barker |

Illinois Attorney General Lisa Madigan’s office has “serious concerns” about the results of an auction last week meant to set the price to ensure electric service for downstate Illinois.

Madigan’s office sent the regional grid operator that facilitated the auction, the Midcontinent Independent System Operator (MISO), a letter seeking information about its processes and whether it believes auction rules were followed.

MISO runs the grid in parts of 15 states, including Downstate Illinois and Eastern Missouri. Its annual capacity auction is meant to ensure reliability by setting the price paid to power plant owners who agree to keep their generators ready to pump electrons into the grid at peak times.

But so-called capacity prices jumped nine-fold from last year and closed 40 times higher than neighboring regions in MISO. Consumer advocates estimated Ameren Illinois customers who aren’t on a fixed power contract or must renegotiate soon could face a 10 percent jump in electricity.

The two main beneficiaries are an Exelon nuclear power plant, which the company has complained is losing money, and the owner of nine downstate coal plants, Dynegy. Dynegy last year said MISO’s auction rules could lead to volatile pricing. It suggested moving downstate Illinois into adjacent grid operator PJM Interconnection, where capacity prices tend to be higher.

A spokeswoman for Madigan’s office said “we are taking a closer look at this given the substantial increase in revenues that it will mean for Dynegy and Exelon and, alternatively, the adverse impact it will have on ratepayers’ monthly bills. We are looking at a number of options for next steps.”