There’s a battle afoot to reshape Missouri’s green energy law.
Renewable energy advocates and utilities are squaring off to establish how much of Missouri’s electricity is derived from renewable resources – with the cost to consumers in the balance.
Renew Missouri, the group formed several years ago to advance the state’s existing renewable energy initiative, known as Proposition C, plans to go back to voters this fall and ask them to mandate more wind and solar power. The utility industry lobby, meanwhile, plans to propose its own legislation to clarify the existing law, and says it may offer up a competing ballot initiative.
“We would like to see a clear and precise implementation of Proposition C before any ballot initiative that goes above and beyond and has a significant cost impact,” said Trey Davis, executive director of the Jefferson City-based Missouri Energy Development Association.
Ultimately, voters or legislators would to forced to choose among competing visions for the state’s energy future – a philosophical tug of war that goes well beyond a referendum on clean energy.
The renewable energy industry wants to speed Missouri’s transition from coal-based electricity to cleaner wind and solar, arguing it will not only improve air and water quality, but also stimulate thousands of new homegrown jobs. Utilities, meanwhile, say they realize the benefit of renewable energy development but don’t want a mandate to force their hand and further drive up customer bills.
The debate goes back to 2008, when Missourians voted by a 2-1 margin to require investor-owned utilities like Ameren to derive 2 percent of their electric generation from renewable resources in 2011 – a percentage that would steadily increase to 15 percent in 2021. It further stipulated that electric bills couldn’t increase more than 1 percent over what they would be otherwise.
The measure seemed simple. It drew no organized opposition.
But implementing the law hasn’t been so easy.
Utilities, the renewable energy industry and consumer groups bickered for months over rules developed by the Public Service Commission. Then, in a victory for utilities, a little-known legislative committee known as the Joint Committee on Administrative Rules struck down parts of the PSC rules. The issue ultimately landed in court, which also sided with the utilities in a recent ruling.
Disappointed with how the 2008 ballot measure turned out, the state’s renewable energy industry resolved to fix what it considered broken. The group is setting out to put in place a more aggressive green power mandate – one that would put Missouri on par with Illinois.
The initiative still needs Secretary of State approval before Renew Missouri can collect signatures to put it on the ballot this fall. The mandate they plan to take to voters would require utilities to get 5 percent of their electric generation from renewable resources by 2014. The amount would steadily increase to 25 percent by the end of 2025.
The proposal would also adjust how the maximum allowed rate impact is calculated, replacing a 1 percent cap with fixed dollar amounts that vary according to customer class.
For residential customers, the increase will vary according to usage, with the average bill climbing as much as $3. Commercial customers would pay an average of up to $11 more per month and the largest energy users, such as factories, could pay up to $150 a month extra.
“The goal is for this to be clear,” said P. J. Wilson, executive director of Renew Missouri.
To help offset the effect of higher rates, the proposal also includes additional funding for the Missouri Office of Public Counsel – the state office that serves as the main line of defense in utility rate cases and other matters before the PSC. The office has seen its budget reduced substantially in past years while utility rates have climbed.
While the utility industry stayed silent the last time Renew Missouri took a ballot initiative to voters, it won’t this time.
The utility industry doesn’t want the green power mandate strengthened, arguing it will further increase electric rates. And the group says the proposal unfairly gives the biggest energy users a break at the expense of residential customers and small businesses.
“Those are the folks that are also feeling hit on their pocketbooks the most,” Davis said.
What’s more, MEDA argues that funding for the Public Counsel – its adversary in rate cases – shouldn’t be tied to the renewable energy law.
The group last week announced plans to file legislation making changes to the existing renewable energy law, though it hadn’t yet announced a sponsor or filed the bill as of Friday.
Davis said the bill would be an attempt to clear up the existing law, further helping utilities recover their costs, clarifying the existing 1 percent rate cap and establishing how utilities comply with the mandate. The group also wants regulatory incentives for the use of agricultural products, such as biomass, for electricity generation.
“We’re looking to make strong investments in renewable energy for our customers, but we’re doing it in a cost-effective way that does not increase their rates more than 1 percent,” he said.
Davis said MEDA is considering a ballot initiative to compete with Renew Missouri’s proposal, but wasn’t specific about what would prompt the group to do so. He would say only that utilities would “take that path if necessary.”
Renew Missouri, meanwhile, said it isn’t concerned about the possibility of dueling ballot initiatives. And Wilson questions the utility’s concern about the potential for higher electric rates.
In fact, the group developed the ballot measure only after reaching out to various consumer groups for their input.
“I don’t know who’s more qualified to talk about impact on ratepayers,” he said, “the utilities, or the ratepayers themselves?”
Consumer groups aren’t endorsing the ballot measure. But representatives acknowledge being consulted on how the revamped renewable energy proposal would affect electric rates.
“We were glad to be at the table,” said Diana Vuylsteke, a lawyer representing the Missouri Industrial Energy Consumers, a group of the state’s largest power users.
John Coffman, a lawyer representing Missouri Consumers Council, went a step further, saying the renewable energy proposal is an improvement for consumers compared with the existing law.
Beside increasing funding for the Office Public Counsel – an office Coffman used to run – it would require utilities to recoup costs for complying with the law as part of larger rate cases, not in a separate proceeding. That would ensure a more thorough review that would best serve utility customers, Coffman said.
“That initiative would be immensely better from a consumer perspective than the current law,” he said.