September 18, 2014

Missouri Supreme Court hears arguments this morning in case involving exemption from law for Empire District

By Wally Kennedy | Joplin Globe | September 18, 2014 |

The Missouri Supreme Court this morning heard oral arguments in a case brought by Renew Missouri against the Missouri Public Service Commission over an exemption granted to The Empire District Electric Co. from the solar energy provisions of the Missouri Clean Energy Act.

That act, known as Proposition C, was on the November 2008 ballot in Missouri and was approved by more than 66 percent of voters. It created a renewable energy standard in the state, requiring utility companies to gradually increase their dependence on renewable sources annually until 15 percent of the energy used in the state was from renewable sources, such as wind or solar.

That initiative also required that energy rates not increase by more than 1 percent annually.

Before voters approved the act, state legislators passed an exemption to the initiative that ultimately benefited just one company in Missouri: Empire.

That exemption, put into law at the behest for former state Reps. Bryan Stevenson, R-Webb City, and Ed Emery, R-Lamar, stated that any electric company that achieved renewable-energy use equal to or greater than 15 percent by Jan. 20, 2009, “shall be exempt from a requirement to pay an incentive to any customer who installs a solar-energy system and shall also be exempt from meeting mandated solar renewable energy requirements.”

The legislative amendment was attached in the waning hours of the spring 2008 legislative session to a broader bill approving a sales tax exemption for energy-efficient appliances.

At the time Brad Beecher, then a vice president and chief operating officer for Empire, said that while he supported the overall goal of 15 percent, he didn’t want utilities in Missouri tied down to specific mandates for specific sources of renewable energy. Beecher is now the utility’s president and chief executive officer.

“Right now we are not going to be shoved into solar,” he said in July 2008. “Right now, it is more expensive … We could meet it, but it would add cost.”

But the judges, during spirited questioning today, noted that voters in Joplin, when they endorsed Proposition C, were expecting a rebate for solar, and were most likely unaware that the Missouri legislature had carved out an expemption for Empire ahead of the statewide vote in November of that year.

Empire attorney, Russell Mitten, also told the judges today that the utility went out and purchased additional wind energy from a Kansas wind farm in order justify getting the exemption that was put into law that spring.

He also noted that other Missouri utilities could have done the same thing.

But Henry Robertson, attorney for Renew Missouri, said the timeline was too short for that to happen and other utilites weren’t able to take advantage of the exemption.

If the court determines the exemption is invalid, Empire could have to offer a rebates to customers who install solar systems at their homes.

That exemption has been challenged in a series of lawsuits that have argued the lawmakers did not have the authority to approve the exemption because it was approved after supporters of the initiative petition had submitted their signatures to get it on the ballot, even though it was before the November vote.

In its brief filed with the court, Renew Missouri argues that Empire should not be exempt from a so-called solar “carve-out’’ that mandates investor-owned utilities get 2 percent of their renewable generation from solar sources. The law also ordered utilities to offer customers a $2-per-watt rebate for solar photovoltaic installations less than 25 kilowatts.

Empire’s exemption was challenged in court by a solar company in Springfield. That court and an appeals court ruled that the dispute should first be heard by the Missouri Public Service Commission.

Renew Missouri, which crafted the petition language and initiated the 2008 volunteer signature drive, filed a complaint with the commission in January 2013. But in its dismissal of the complaint against Empire in November of that year, the commission said that for a utility that already gets 15 percent of its generation from renewables, the solar requirements would impose “an extra compliance burden.”

Renew Missouri appealed to the Missouri Supreme Court in January, arguing that the amendment for Empire is invalid because it was a deliberate action to help one utility avoid providing solar rebates to its customers.

At the time voters passed Proposition C, Empire had two 20-year contracts for 255 megawatts of electricity from two wind farms in Kansas, getting enough electricity for 67,000 homes.

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