Missouri Utility Proposes Major Ramp-Up in Efficiency

Late yesterday, Kansas City Power and Light (KCPL) asked state regulators for approval to offer more and better energy efficiency programs to reduce electricity demand and lower energy costs for its customers.  Under the plan, KCPL will invest about $25 million per year over the next three years to help their customers save energy.  For every dollar invested, they will avoid spending about $4 dollars on generating, transmitting and distributing power, which will save customers hundreds of millions of dollars in energy costs over the lifetime of the efficiency measures installed.

This is a big step forward for Missouri, where, despite widespread agreement on the value of energy efficiency, utilities and regulators have had a difficult time agreeing on rules and business models that will deliver savings in a way that is a win for the public as well as for utility shareholders.  The Missouri legislature passed the Missouri Energy Efficiency Investment Act in mid-2009 directing the utilities and regulators to work together to capture all of the cost-effective potential for saving energy. It was not until spring of 2011 that the commission issued final rules to implement that law.  KCPL is the first Missouri utility to offer a specific proposal that meets the requirements of those rules, and by the time the plans are approved and the program are made available to customers, three years will have passed since the law was adopted.

Today’s proposal represents a five-fold increase in efficiency investment by KCPL.  The measures installed (ranging from lighting and appliances to weatherization of buildings and new industrial equipment) in year one will save more than 116,000 megawatt-hours of power every year.  This is about the amount of power consumed in 11,000 homes over the course of a year.  Additional measures installed in year two will double the annual savings, and the savings will compound again in the third year. 

The Commission is expected to issue an order in response to this plan within the next 120 days.  Over the course of those 120 days, many details about the plan will be debated and adjusted.  We hope that through the course of this proceeding, everyone involved will keep at the top of mind the enormous value to Missouri that accomplishing these goals will bring, and will work toward an outcome that maximizes the benefits to customers and the environment.