Kirksville, Mo. – A hold-up in adopting rules for a renewable energy proposition has had ripple effects throughout Missouri’s energy industry, including regionally with a multi-million dollar wind farm’s construction waiting on a legislative decision.
The Trade Wind’s development in the Shuteye Creek area of Adair and Sullivan counties has come to a standstill pending a power purchase agreement with an electric utility.
The stalemate stems from Jefferson City, where a ballot measure approved in 2008 is the focus of debate on how to preserve voters’ intent as the proposition becomes law.
In 2008, two-thirds of state voters approved Proposition C, which asked voters whether investor-owned electric utilities should be required to “generate or purchase electricity from renewable energy sources such as solar, wind, biomass and hydropower.”
The utilities would be required to obtain at least 2 percent of their retail sales from renewable sources by 2011, increasing to 15 percent by 2021. The proposition also stated that no more than a 1 percent rate increase could be passed on to consumers for the energy.
But there is considerable debate about the voters’ intent, whether they expressed solely an interest in offsetting the state’s dependence on fossil fuels for energy or wanted that growth of renewable energy to be based in Missouri as an engine of economic development.
“The arguments going to be about what has to be reviewed,” said Trade Wind Project Manager Rod Northway. “Is it more beneficial to pay a little bit more for wind power for the economic benefit of having those projects in the state versus paying less for Renewable Energy Credits generated in another state.”
The proposition went to the state Public Service Commission, the regulatory agency that oversees public utilities, after its 2008 passage. The PSC was charged with crafting the rules that would make up the proposition.
A portion of the rules included a geographic sourcing requirement, requiring the utilities to purchase renewable energy created generally within the state.
“I believe the commissioners [on the PSC] felt including geographic sourcing was an intent of the voters, even though the proposition didn’t say it had to come from Missouri” said PSC Chief of Staff Richard Moore.
The commissioners voted 3-2 in favor of including the sections and approved the rules before passing them on to the Missouri secretary of state.
But in July, the Joint Committee of Administrative Rules voted to strike the portion regarding geographic sourcing from the rules, citing an unknown cost factor of developing those renewable resources and the voters’ intent.
Utility companies, including Ameren, oppose the geographic sourcing section, saying the greater cost is not what voters wanted.
“We want to see Prop C implemented as close as what the voters voted for,” said Mike Cleary, communications executive for Ameren. “Geographic sourcing limits utilities’ ability to respond to Prop C at the lowest cost.”
He said there are still a lot of questions up in the air, including the requirement of the proposition that no more
than a 1 percent increase be assessed for the more expensive renewable energy.
“We certainly support renewable energy and we support developing more in Missouri, but we still have a responsibility to our customers to do it in an economically responsible way,” Cleary said.
The decision will go to the Missouri legislature, with both the House and Senate required to agree with the committee’s decision to strike the portions in 30 legislative days or the rules go to Gov. Jay Nixon for his approval as written by the PSC, geographic sourcing and all.
While the 30 legislative days don’t start ticking until the first week in January when the House and Senate convene, the more than three month period means Trade Wind will also have to wait to find if any Missouri utility companies even want state-sourced renewable energy.
“Shuteye Creek is good to go,” Northway said. “We have the land leased. The transmission agreement is signed. We’ve got the wind data we need. The environmental reports are substantially complete, but we need a power purchase agreement with a utility.”
Northway said until a utility has agreed to purchase the renewable energy the 60,000 acre wind farm would generate, construction will not start.
And utilities are sitting and waiting to see what they must do in order to comply with Proposition C.
“We’re just sitting, waiting for the Request for Proposals from a utility company seeking wind power,” Northway said. He said going from the first RFP to securing a bid could take up to 12 months.
Which means it’s more waiting for residents and taxing districts in Adair and Sullivan counties as well. During the first year of construction, which was hoped to have started this past August, Trade Wind said it plans to employ 310 workers and invest $36 million in the project.
Once up and running, based on a plan of producing 200 megawatts, the wind farm is projected to develop a total tax revenue of $1.18 million per year.
While a tax abatement was approved for the wind farm development by Sullivan and Adair counties, that influx of money is something the local economy and taxing districts could certainly use, said Novinger Superintendent Bill Lake.
“I hope our local senator and state representative would try everything they can to get this through so the community can get the money. They certainly need it,” he said.
The Novinger school district would receive a considerable amount of the tax revenue generated by the wind farm, but despite plans to have a shovel in the ground already, Lake said none of the projected revenues were used in budgeting considerations.
“We don’t want to use the funds to operate the school,” he said. “We’d use it facility-wise, book-wise, but not to pay the bills. We want this to become extra stuff like smart boards, technology. All just icing on the cake.”
And despite the tumultuous upcoming fiscal years for school districts, Novinger held off on expecting something that hadn’t been delivered, Lake said.
“We haven’t lost anything yet. The only thing we could lose is the hope of having the wind farm,” he said.
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