Energy Consumers Save Under Missouri's New Efficiency Law

When it takes effect on August 28, the new law will give the Missouri Public Service Commission the ability to make utilities' investments in energy efficiency programs at least as profitable as building new power plants or making capital investments.

Before the bill was enacted, the costs associated with building new power plants could be recovered by utilities but costs related to efficiency could not, making increases in efficiency a more difficult business option.

Now, utilities will be able to include the costs of qualifying efficiency programs in the package of costs which they may recover, treating energy efficiency as a generation source.

Because implementing energy efficiency programs is much less expensive than capital costs related to building new power plants, utility customers will save money.

The energy efficient new Lewis and Clark State Office Building in Jefferson City, Missouri is the first state office building to receive LEED Platinum certification. (Photo by Mike Sinclair courtesy McQuay International/DNR)

To qualify, energy efficiency programs, which require Commission approval, must be cost-effective or in the public interest, result in energy savings and be beneficial to customers in the customer class in which it is proposed.

"Energy efficiency saves customers money, creates jobs and is good for our economy," Governor Nixon said. "Missourians spend approximately $20 billion each year on all of our energy needs and import nearly 95 percent of the primary energy sources we use. By becoming more energy efficient and reducing our expenditures on energy, we keep more of these energy dollars in Missouri's economy and in Missourians' pockets."

Governor Nixon signed Senate Bill 376 into law during a public ceremony following tours of two energy efficiency projects at customers of KCP&L, an investor-owned electric utility headquartered in Kansas City.

Under this legislation, KCP&L will be able to integrate additional energy-efficiency programs into its operations and save consumers millions of dollars each year.

The governor toured Altec Industries Inc. in St. Joseph, which is working with KCP&L to replace old high-pressure sodium light fixtures with more efficient fixtures. Once all these replacements are completed, the companies estimate a savings of more than 800,000 kwH of electricity.

The governor also visited the new Chilled Water Plant at the University of Missouri-Kansas City. The university is installing efficient lighting, better exhaust and lab controls, plumbing that conserves water, and night set-backs for heating and cooling systems. Under a rebate program with KCP&L, and because of reductions in energy consumption, these upgrades are paying for themselves and are reducing the university's carbon footprint.

"With this legislation, KCP&L has more tools to meet the challenge of managing our region's increasing demand for electricity, keeping costs for that power among the lowest in the nation and protecting our environment now and for future generations," said KCP&L President Bill Downey, speaking on behalf of the more than 100 members of the statewide coalition that sponsored and supported Senate Bill 376.

"Missouri currently stands at the crossroads of how to best meet our energy needs," said state Senator Brad Lager, who sponsored the legislation. With the passage of this bill and the adoption of energy efficient practices, Missourians can dramatically reduce their energy consumption and benefit immediately from the savings. Now, energy companies can partner with their customers to better utilize the energy they currently consume."

Beyond the efficiency incentives for consumers and producers of energy that are provided in Senate Bill 376, the legislation also has positive environmental impacts. The legislation's focus on efficiency and conservation led to its support by many individuals and organizations seeking to green Missouri's energy infrastructure.

"Encouraging investment in energy efficiency is one of those rare public policy initiatives where everyone wins," said Rebecca Stanfield, senior energy advocate with the Natural Resources Defense Council. "Consumers win with less expensive energy, utilities are able to invest in a solid business proposition, and communities win as we move towards a cleaner environment and more sustainable economy."

In a report released last week, the NRDC shows that Missouri could become a national leader in renewable energy production that could bring economic investment, new tax revenues, and job creation to Missouri's struggling rural communities.

"The good news is that Missouri's economic future is directly tied to its energy future," said Martin Cohen, an independent energy policy analyst who authored the report. "Within Missouri's borders are vast resources of wind, land, and water – all the ingredients needed for Missouri to become a national leader in new energy development, creating tens of thousands of good jobs and substantial new sources of income for farmers."

The report, "A Clean Energy Economy for Missouri: Analysis of the Rural Economic Development Potential of Renewable Resources," examines the potential for renewable energy resource development, looking at how Missouri's wind, biomass and biogas potential will benefit rural communities.

The report notes that Missourians spend more than $18 billion every year on natural gas for heating, fuel for cars and trucks, and electricity to power homes and businesses.

With a population of nearly six million people, that comes to $3,000 in energy costs for every person in Missouri. Most of those dollars leave the state because 84 percent of Missouri electricity is generated using coal shipped in from Wyoming.

Steve Flick, board president of the Show Me Energy Cooperative, a nonprofit, producer-owned cooperative founded to support the development of renewable biomass energy sources in west central Missouri, believes that renewable energy is the way to a more prosperous future for the state.

Flick said, "Investing in renewable energy resources like biomass, wind, and biofuels supports the foundation of the United States by drawing the economy back to agriculture and by revitalizing rural communities."

Copyright Environment News Service, ENS, 2009. All rights reserved.