An Efficient Missouri -- Worth the Effort, but Requires Leadership

The American Council for an Energy–Efficient Economy (ACEEE) reminded us today about the enormous benefits that an aggressive energy efficiency strategy would bring to Missouri.  A serious commitment to energy efficiency would, according to the organization's extensively researched new study, reduce the costs that Missourians pay for energy by billions of dollars (more than six billion over the next 14 years), and increase employment in Missouri by 8500 workers.

The study comes more than two years after Governor Nixon signed the Missouri Energy Efficiency Investment Act, designed to encourage the state’s electric utilities to go after these benefits for Missouri customers.  New rules adopted pursuant to that legislation allow utilities to earn performance incentives for successful efficiency programs, and to secure more timely recovery of program costs than typical under traditional utility rate regulation.

So, all systems seemed to be a go for efficiency in Missouri, that is, until this spring, when Ameren threw a big bucket of cold water on the process.

Unfortunately, the state’s largest utility, Ameren Missouri, has decided to walk away from efficiency as a resource, in order to invest in a more expensive mix of energy sources that will create higher revenues for its shareholders.  They stated as much in their Integrated Resource Plan, filed in February with the Missouri Public Service Commission.  NRDC, along with the Missouri Department of Natural Resources and the Office of Public Counsel are working to persuade the commission to reject this plan, and require Ameren to choose a mix of resources that will result in greater efficiency and lower electric bills for customers. Click here to see our comments.

In contrast to Ameren Missouri, the state’s other major utility, Kansas City Power and Light (KCPL), has filed a notice announcing that it will submit a new and more aggressive energy efficiency plan under the new commission rules late this summer. 

Neither Ameren Missouri nor KCPL love the new rules, and in some respects we agree that the rules do not accomplish everything necessary to put energy efficiency on a level playing field with other resources like coal and nuclear power.  But, the utilities have reacted in very different and notable ways.  While KCPL is making the best of the rules to ensure that its customers will see significant savings, Ameren has taken a “my way or the highway” approach, to the detriment of customers and the economy of the eastern half of the state.  

What should Missouri policy makers do to ensure that the state’s residents and businesses reap the benefits documented in the ACEEE study?  For starters, the Public Service Commission must reject Ameren Missouri’s nonsensical plan, and require the company to meet its obligation to choose resources that will result in the lowest customer costs over time.  Even Ameren agrees that the aggressive efficiency scenario is the cheapest choice for Missouri customers. 

In addition, Missouri legislators should look across the river at Illinois, where Ameren’s Illinois affiliate has been very successful on the efficiency front.  According to independent evaluators, in the second year of programs (2009-2010), Ameren Illinois installed enough efficiency measures to reduce its load by the equivalent of 13,000 homes.  If Ameren can do it in the Land of Lincoln, it can do it in the Show-Me State too.