Fears of Soaring Prices & Rolling Blackouts

This week the State of Illinois issued a grim announcement to its residents. ComEd, the electric utility that operates the “last mile” for most of Illinois’ residents in northern Illinois, is part of the PJM electrical grid. In good times, electricity flows back and forth across this grid to wherever it is needed the most. However, for summer 2022, the State has not been able to get the PJM grid, nor any supplier of electricity within the grid, to quote a price-point peak for electricity by the kilowatt. This lack of a price quote could move Illinois’ electricity prices this coming summer from “partly deregulated” to “fully deregulated.” Last-mile suppliers such as ComEd will have to buy electricity for whatever price it is being sold for, and pass the costs along to their customers. Rolling blackouts are also possible throughout the ComEd service area.


Last week, the Midcontinent Independent System Operator (MISO) released the results of its 2022-2023 annual Planning Resource Auction (PRA) indicating capacity shortfalls in both the north and central regions of MISO. This encompasses parts of 11 states in the Midwest. MISO remains committed to continue its work with members and state regulators to maintain grid reliability across the entire 15-state MISO footprint.


“We have anticipated challenges due to the changing energy landscape and have communicated our concerns through the Reliability Imperative. We have prepared for and projected resource fleet transformation, but these results underscore that more attention is required to offset the rate of acceleration,” said MISO Chief Executive Officer John Bear. “These results do not undermine our ability to meet the immediate needs of the system, but they do highlight the need for more capacity flexibility to reliably generate and manage uncertainty during this transition.”


“The reality for the zones that do not have sufficient generation to cover their load plus their required reserves is that they will have increased risk of temporary, controlled outages to maintain system reliability,” said Clair Moeller, MISO’s president and chief operating officer. “From a consumer perspective, those zones may also face higher costs to procure power when it is scarce.”


Electricity costs will soar beginning in June in central and southern Illinois, due to inadequate power supplies following coal-fired plant closures. Ameren Illinois is within the MISO grid covering much of downstate Illinois.


Critics of policies phasing out coal and natural gas in favor of renewable power are seeing their doomsday forecasts start to come true far faster than even they thought. The price shock downstate also hands Republicans who didn’t support Gov. J.B. Pritzker’s sprawling, costly Climate & Equitable Jobs Act, or CEJA, last year an issue in the upcoming election.


The statute requires the closure of all fossil fuel power plants in Illinois no later than 2045. Effectively, it’s made the usual method of addressing power-supply shortages—construction of new natural gas-fired plants—uneconomic and significantly reduced the tools available to address the shortage that’s emerged.