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State’s new power purchaser snubs Quinn

Arlene Juracek, a former Commonwealth Edison Co. executive recently named by Gov. Pat Quinn to head the Illinois Power Agency, has swiftly reversed several Quinn-backed initiatives to foster development of renewable energy in the state, as well as the federally subsidized FutureGen “clean-coal” plant planned for Downstate Meredosia.

The IPA purchases electricity annually on behalf of utility customers statewide. Ms. Juracek earlier this month took over from Mark Pruitt while he was in the middle of putting together the IPA’s procurement plan for 2012.

In an unexpected move, she reversed Mr. Pruitt’s plan to solicit offers for 20-year contracts for wind farm developers – a priority of Mr. Quinn, who sees green jobs growth as a major part of his economic development agenda for the state. Instead, she plans to solicit offers for one-year contracts only, which the wind industry has complained won’t foster development of new wind farms in the state because developers can’t get financing unless they have long-term sales contracts.

Ironically, Mr. Quinn replaced Mr. Pruitt with Ms. Juracek on Oct. 5, in large part because Mr. Pruitt had resisted earlier Quinn administration moves to give long-term contracts to Illinois wind developers.

“Generally, we are disappointed with the decision,” a spokesman for the Illinois Wind Energy Assn. said in a statement. He said the industry supports a mix of long- and short-term contracts to shield ratepayers from price fluctuations. “It is also the most effective way to encourage investments in diverse energy resource as the legislature envisioned when it passed the state’s renewable energy standard.”

A Quinn spokesman declined comment.

In an email, a spokesman for Ms. Juracek wrote that long-term wind deals don’t make sense when demand is so hard to predict, given that residential customers are leaving the utilities for cheaper alternative suppliers, either by themselves or when their municipalities negotiate deals on behalf of their residents.

“One year wind is extremely inexpensive now; therefore, it is more fiscally prudent to go with one-year solicitations,” the spokeswoman wrote. “Half of the wind power is already under long-term contract. The IPA’s mission is to get the best price for consumers.”

ComEd made exactly the same point in its testimony the IPA recently.

Ms. Juracek’s Oct. 5 nomination to the IPA was controversial largely because she worked 35 years for ComEd, retiring four years ago as a vice-president, and continues to hold stock in ComEd parent Exelon Corp., which is the biggest generator of power in Illinois and bids on IPA contracts.

The spokeswoman for Ms. Juracek said, “Her loyalty will be to the citizens of Illinois and ensuring the best possible rates for their utilities.”

In addition, Ms. Juracek reversed Mr. Pruitt’s plan to solicit bids for power from “clean-coal” plants, a provision aimed at allowing the developers of the proposed FutureGen 2.0 project to finance the part of the project not subsidized by the U.S. Department of Energy. FutureGen is a top priority of Mr. Quinn.

In response, Ms. Juracek’s spokeswoman said, “I am keenly aware of the need to act quickly, but the law says that cost effectiveness must be demonstrated. I am simply proposing that parties get together in a workshop setting to discuss cost-effectiveness criteria for coal solicitation.”

ComEd opposed the clean-coal procurement language.

And, finally, Ms. Juracek removed Mr. Pruitt’s proposal to solicit bids from small-scale solar facilities, a priority of environmentalists’ and also supported by Mr. Quinn. She said in her report that she was committed to including the solar bids in future procurement plans, but would like the idea to be developed more in workshops with interested parties.

ComEd also opposed the small-scale solar procurement.

Ms. Juracek’s revised plan is subject to one more round of comment and then will be submitted to the Illinois Commerce Commission, which has final say.

The IPA’s leadership is an issue with state lawmakers, who may vote in the fall session beginning next week to override Mr. Quinn’s veto of a provision that would have moved the IPA from his jurisdiction to the Illinois Executive Ethics Commission. The provision, inserted by House Speaker Michael Madigan into a bill to ease the way for the FutureGen project, was aimed at protecting Mr. Pruitt, whom the speaker supports and knew had fallen out of favor with the governor.

Mr. Madigan was instrumental in creating the IPA in 2007 as a way to take power procurement away from utilities such as ComEd, which have sibling companies that supply them with the power.

Ms. Juracek’s nomination is subject to Senate confirmation.