Bill would overhaul Missouri’s renewable energy law 

When Missouri voters approved the state’s renewable energy law in the fall of 2008, the ballot proposal evoked images of graceful wind turbines and gleaming solar arrays.

What it produced, instead, was two years of bickering, litigation and regulatory limbo – not to mention fewer clean energy projects than envisioned.

Now, with time running out in the legislative session, the Legislature is being asked to overhaul the law in a new Missouri compromise that attempts to ease concerns of electric utilities, environmentalists and consumers – groups that rarely agree when it comes to energy policy.

The ballot initiative, known as Proposition C, seemed straightforward at the time. It required the state’s four investor-owned electric utilities, including Ameren Missouri, to buy or generate 2 percent of electricity from renewable fuels beginning in 2011, an amount that would step up to 15 percent by 2021. At least 2 percent of it had to be solar power. And the addition of renewable energy couldn’t raise electric rates more than 1 percent.

The new bill, sponsored by Rep. Jason Holsman, D-Kansas City, would repeal the law approved by voters in 2008 and replace it with a new – and less ambitious – renewable energy standard, but one that promises to stimulate new wind, solar and biomass projects – along with jobs -more quickly.

The bill would cut the mandate for renewable energy about in half, resulting in utilities deriving 7 percent, rather than 15 percent, of their electricity from green fuels by 2020. It also would eliminate a controversial provision that allowed utilities to receive credit for subsidizing out-of-state renewable projects, thereby depriving Missouri of the projects and associated jobs. The measure’s backers hope the bill, a product of compromises, can unite the companies, consumer groups and environmentalists and pave the way for real progress.

“It gets action sooner,” said Holsman, who was chosen to lead a special legislative committee on renewable energy and is the lead sponsor of HB 613. “We trade more in the end for less today.”

The bill, co-sponsored by Margo McNeil, D-Florissant, is the product of months of negotiations among a wide range of interested groups.

“We feel like this is a really decent compromise,” Holsman said. “We hope that this bill will lead to economic development that can’t be outsourced.”

Renew Missouri – the clean energy advocates that wrote Proposition C and got it on the ballot three years ago – grudgingly endorses the new bill even though it weakens the state’s clean energy requirement.

“We have a ton of reservations about it as it is, but we think it could be a foothold to get the renewable energy movement going in Missouri,” said P.J. Wilson, a co-director of Renew Missouri.

CAUGHT UP IN CONFLICT

The goals of the 2008 energy law may have seemed simple, but putting it into effect proved complicated. Utilities, renewable energy supporters and consumer groups fought for a year and a half over rules to implement Proposition C, never reaching consensus. The Public Service Commission finally approved a set of rules by a 3-2 vote. But a key provision was later struck down by a little-known legislative committee called the Joint Committee on Administrative Rules.

The provision would have required green power to be purchased from Missouri or neighboring states. However, utilities and consumer groups said the limitation would have driven up electric rates and inadvertently limited renewable energy development in the state.

Utilities successfully argued for a measure allowing them to comply with the mandate by financing renewable energy projects outside the region. They could purchase renewable energy certificates, or RECs – pieces of paper that each represent 100 kilowatt-hours of renewable energy. Purchasing RECs from, say, a Texas wind farm, would probably mean lower cost for Missouri consumers than if a utility built its own wind farm here. But it would mean one less energy project would get built in Missouri, which therefore wouldn’t benefit from any associated jobs.

Renewable energy advocates balked when the Joint Committee on Administrative Rules eliminated the provision, arguing that the decision in effect subsidized economic development and job generation in far-away states.

Holsman’s bill would restore the geographic restriction in an effort to ensure that some new renewable energy projects are developed in Missouri.

In a concession to the utilities, the bill would lower the percentage of power the companies must get from green sources. But the 7 percent mandate they must meet by 2020 would mark a major improvement over the 3 percent of electric generation they currently get from renewable power sources.

Just as Proposition C required some solar power development, Holsman’s bill requires that a relatively small portion of the renewable power be fueled by the sun. The measure also includes $108 million of incentives available to consumers in the form of rebates that could help offset the costs of installing solar systems.

The bill also seeks to protect consumers with provisions to limit the rate impact for homeowners and small businesses, and guarantees the state’s biggest industrial customers that their annual electric bill wouldn’t rise more than $100,000.

TIME RUNNING OUT

Neither Ameren Missouri nor the Missouri Energy Development Association, the lobbying association for investor-owned utilities in Missouri, returned calls seeking comment on the bill.

Jeff Davis, a Republican member of the PSC and a vocal critic of Proposition C, said Holsman’s bill was an improvement if it was approved, because it would be less expensive for consumers and should provide some certainty for renewable energy developers that gets projects built.

But with just a few weeks left in the legislative session, Davis questions whether the bill will make it to the governor’s desk.

“I really think time is running out,” he said.

A special renewable energy legislative committee chaired by Holsman approved the bill by 10-0 vote this month. The measure could be voted on by the full House as soon as this week, Holsman said.

“Right now, we have everybody in the boat,” he said. “This bill is a product of compromise from all parties. We’ve exhausted ourselves coming up with this.”

Holsman is less certain his bill will survive the Senate.

“You never know what the Senate is going to do,” he said.

What is certain, say proponents and critics of Proposition C, is that the uncertainty around the state’s current renewable energy policies hasn’t helped.

“It has all but scared off developers,” Wilson said. “They’re just amazed at the political resistance in Missouri.”