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Steam emanates March 16, 2011, from Exelon Corp.’s nuclear plant in Byron.

SPRINGFIELD — An Illinois House committee gave initial approval Wednesday to a massive energy policy overhaul that could keep open Exelon Corp.’s financially struggling Clinton and Quad Cities nuclear power plants.

Lawmakers on the House Energy Committee widely acknowledged that the bill, which was introduced Tuesday morning and includes subsidies for both Exelon-owned nuclear plants and Dynegy-owned coal plants in Southern Illinois as well as new rate structures, energy-efficiency requirements and investments in renewable energy, will require continued negotiations before it’s ready for a vote.

“We still have work to do on some issues,” said the bill’s sponsor, state Rep. Bob Rita, D-Blue Island.

The extent of those issues became clear over the course of a Wednesday committee hearing that lasted nearly seven hours. Even organizations that have been at the negotiating table with Exelon for months and generally support that plan are opposing certain aspects.

Exelon has said it wants to see action on the bill during the General Assembly’s fall veto session, which is scheduled to end Dec. 1. The House and Senate canceled their scheduled Thursday session and won’t return to Springfield until after Thanksgiving.

The energy giant says the plan is the product of intense negotiations with environmental and consumer advocacy groups that aren’t typically its allies.

“We’re very proud of the amount of agreement we’ve achieved with environmentalists, consumer advocates, (and) wind and solar companies,” Fidel Marquez, senior vice president for governmental and external affairs for Exelon subsidiary Commonwealth Edison, said during a Wednesday morning conference call.

Environmental groups, including the Natural Resources Defense Council, the Sierra Club and the Environmental Defense Fund, support many of the bill’s provisions, including the extension of subsidies to nuclear power. Advocates are most excited about provisions that would fix long-standing problems with the state’s existing incentives for renewable energy and increase energy-efficiency programs.

“We’re really excited that we’ve got the nucleus of a path for Illinois’ future that works for our environment, that works for consumers and that’s going to create a tremendous amount of jobs and economic investment,” said Jack Darin, director of the Illinois chapter of the Sierra Club.

But his organization and other environmental groups don’t support recently added provisions in the bill that would subsidize the Dynegy coal plants that are facing closure. They say it’s bad policy to support the continued burning of fossil fuels, which contributes to climate change.

Dynegy, meanwhile, is part of a group that has sued to block subsidies for nuclear plants in New York. “Presumably, if Dynegy’s part of a comprehensive package here, then we wouldn’t oppose the plan here,” said Dean Ellis, senior vice president of regulatory affairs.

The company argues that the subsidies are needed because the southern Illinois plants are losing money due to the structure of the downstate energy market.

Another complicating factor is opposition from downstate power utility Ameren Illinois, which has a series of objections to the bill as drafted, said Craig Nelson, senior vice president of regulatory affairs and financial services.

Nelson noted that a previous version of the bill would have increased monthly bills for the average Ameren residential customer by 77 cents, and he expects that figure to be higher under the current version.

ComEd officials, meanwhile, estimate that their average residential customer would see an increase of 25 cents per month.

The potential impact on consumers is a major source of opposition to the bill.

Much of the concern is centered on a proposal to shift to a so-called “demand charge,” which consumer advocates warn could lead to unpredictability for energy bills.

A previous version would have been based on a customer’s peak demand during the month, but Exelon said that after listening to opponents, it adjusted the proposal to take an average in order to prevent possible bill spikes.

However, that hasn’t been enough to reassure some opponents, including AARP Illinois, the Illinois Public Interest Research Group and the Illinois attorney general’s office.

Cara Hendrickson, chief of the attorney general’s public interest division, said all these factors are evidence that the legislation is trying to do too much in one package.

If the immediate goal is to preserve the Clinton and Quad Cities nuclear plants, that could be addressed in a stand-alone bill, Hendrickson said.

“There is no reason that that issue needs to be packaged with this whole package of additional spending,” she said, noting that those subsidies are a small fraction of the overall cost, which the attorney general’s office estimates is $10 billion through 2030.

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