Renewable State Updates: Missouri

With the state and federal legislatures out of session, it has been a relatively slow couple of weeks in the world of renewable energy law.  Fortunately for you, what may seem like a lack of significant new developments is actually an excellent opportunity for me to highlight a few of the significant stories that I wasn’t able to cover the first time around.

With this in mind, it is time once again to continue our series of state-by-state updates of some of the most signficant renewable energy stories.  Today, we will focus on Missouri. 

Ranked 13th in the nation for wind capacity, 24th in the nation for solar resource, and first in our hearts, the Show-Me State is currently facing a critical juncture in its renewable energy development due to uncertainty surrounding the state’s Renewable Portfolio Standard.  With this background in mind, let’s take a look at what has been going on in the Missouri…

Missouri Public Service Commission Announces New Chairman 

Missouri Governor Jay Nixon recently appointed Kevin Gunn as the new chairman of the Missouri Public Service Commission. Chairman Gunn will replace Robert M. Clayton III, who will remain on the Commission. 

Chairman Gunn was appointed to the Commission in 2008 to a six-year term. Prior to that appointment, Chairman Gunn was an attorney in St. Louis. He received his bachelor’s degree from American University and his law degree from Saint Louis University School of Law.

In commenting on the appointment, Governor Nixon stated that

Kevin Gunn has experience and vision that will be invaluable as we formulate Missouri’s energy policy for the coming decades. A key part of that will be wise investment in renewable energy sources, and Kevin will give us strong leadership on that issue. I appreciate Commissioner Robert Clayton’s service as chairman of the PSC for the past two years in standing up for the fair treatment of Missouri energy consumers, and look forward to his continued good work on the commission.

Missouri RES Provisions Still in Flux

As I briefly mentioned above, in 2008, Missouri voters approved ballot initiative Proposition C by 66% of the vote. Proposition C requires electric utilities to obtain 15% of their electricity from renewable sources by 2021, and includes a cost cap that limited the increase to retail rates resulting from compliance with the mandate to an average annual 1%. However, the language of the ballot measure was ambiguous, and a controversy over the voters’ intent continues to be debated by legislators as they work to clarify the statute.

There are a number of issues at the heart of this debate, but perhaps the most contentious is whether the renewable energy has to be generated in or delivered to Missouri, as opposed to allowing a Missouri utility to buy a REC (renewable energy credit) from another location in order to meet the RES requirement. 

I have discussed the importance of geographic sourcing requirements before, and this is yet another excellent example of how important the issue can be in practice.  Public utilities justifiably want to purchase RECs from projects located in other states, because those RECs are almost always cheaper than building their own generation or buying RECs from projects within Missouri.  Nonetheless, allowing for the purchase of out of state RECs effectively destroys the incentive to develop renewable projects within the states, as there is no longer any guarantee for project developers that the energy that they generate will be purchased by the utilities.

To address the contentious issues surrounding the RES, the Missouri Speaker of the House formed a Special Committee on Renewable Energy and appointed Representative Jason Holsman, a Democrat from Jackson County, to chair the Committee.  Rep. Holsman, a supporter of renewable energy, filed legislation (HB 613) to address the Prop C issues.   Among other things, this legislation specified that utilities can only satisfy their RES requirement with energy that is generated within the state, or energy that can serve Missouri customers. 

To complicate the political dynamics on this issue, a nuclear cost recovery bill was also proposed that, in many peoples’ eyes, may have hindered passage of HB 613. Through this bill, Ameren and the other regulated electric utilities, the electric cooperatives, and the municipal utilities proposed allowing Ameren to recover the costs of obtaining an early site permit from ratepayers for the construction of a new nuclear plant. There was strong opposition to the bill from certain members of the Senate and all efforts to move the bill forward were stalled. Though the two bills were unrelated on their face, the nuclear bill and the renewable energy bill have been indirectly associated with one another, and a loss of momentum for the nuclear bill harmed the chances of any success for the Proposition C revisions.

Ultimately, it will still be a while longer before we know the fate of Missouri’s Renewable Energy Standard.  The Missouri legislative session concluded on May 13, 2011, and no progress was made on either of the bills prior to the conclusion of the session.