Missouri Renewable Energy Mandate in Limbo

By DICK ALDRICH

Missouri News Horizon

JEFFERSON CITY, Mo. – Nearly two years after Missourians voted to create a renewable energy standard, the details of making the rule a reality languish in a maze of governmental rulemaking procedure.

Thursday, members of the Joint Committee on Administrative Rules (JCAR), a legislative committee that oversees state rulemaking, told the commission charged with drafting the rule to find more substantial common ground between supporting and opposing interpretations of the submitted rule.

JCAR will hold a follow-up meeting next week to determine the fate of the new renewable energy rule.

Opponents of rules drawn up and submitted by the Missouri Public Service Commission argue that some of the rules are vague and that the PSC’s figures about how much the rules will cost utilities – and by extension, customers of electric companies – are wrong.

“These rules should have been in place last November,” said Henry Robertson, a lawyer for Renew Missouri, a group that backed ballot initiative that yielded the citizen vote on the renewable rule. “I don’t see any way there can be a compromise in less than a week.”

“I think this is headed to court.”

Under state statutes, JCAR is charged with the responsibility of reviewing administrative rules filed by state agencies for compliance with Missouri statutes.

The committee can, after having a hearing on a set of rules, disapprove of any rule or any portion of any rule. The disapproved rule can then not be published by Secretary of State and must go before the General Assembly. If the House and Senate vote to uphold JCAR’s action within 30 legislative days, then JCAR’s actions stand. If not, the rule is published.

Robertson believes a recent Missouri Supreme Court decision prohibits the committee from disallowing rules established by citizen referendum.

The rules as they are currently written outline how Missouri’s four regulated energy providers: AmerenUE, Kansas City Power & Light, KCP&L – Greater Missouri Operations Co. and the Empire District Electric Co., must comply with the voter mandate that utilities move to lesser reliance on coal.

The vote mandated that electric companies must either generate or purchase at least 2 percent of the electricity they sell from renewable sources. That percentage increases to 15 percent by 2021.

The companies are required to meet those percentages either by generating the electricity themselves, or by purchasing renewable energy credits. The proposition mandates at least two percent of the renewable energy must come from solar sources.

The proposition also caps consumer rate hikes to pay for the renewable energy at one percent. Proponents insist that the one percent rate hike is over the course of the bill. Opponents question the time frame.

Opponents’ arguments echo those of Public Service Commissioner Jeff Davis, who, in a dissenting opinion to the board’s rules, wrote that the rules were vague, and could lead to one percent rate hikes per year until 2018.

“The only thing I can say for sure is that years of litigation will be necessary to sort out the meaning of these statutes,” Davis wrote. “I have serious concerns that the actual text of the voter-approved statutes may be incorrectly interpreted to have an adverse impact on utility consumers – one that was definitely not contemplated by the voters in light of the ballot language…”

Opponents also had questions about the rules cost estimates.

The fiscal note attached to the rule shows the cost of carrying out the rules to utilities and other businesses would rise from about $46 million in 2011 to about $52 million in 2014.

Ed Downey, a lawyer representing the Missouri Industrial Energy Consumers, said the methodology of drawing up the cost estimates was flawed. By his group’s calculations, the costs to utilities and other industries could wind up in the billions.

“This fiscal note is off by billions of dollars,” Downey testified. “I’d submit to you that’s not close enough for government work.”

Members of power generators and consumers were united in their opposition to the rule. An unusual fact that those testifying against the bill and JCAR leaders were quick to note.

Ameren UE attorney Tom Byrne testified that the opponents to the bill “almost never agree to anything, but we do on this …[this rule] will cost tens of millions beyond what Proposition C intended.”

PSC staff members and bill proponents were unmoved y the opposition.

“The rule is not arbitrary or capricious – we followed directly along with what we were mandated to do,” testified PSC attorney Annette Slack.

“Using power and (renewable energy credits) generated outside Missouri “was not the voters’ intent,” she said, confronting a favorite complaint of opponents.

Rule supporter Khris Heisinger, an attorney that represents six different wind power companies, echoed Slack’s sentiment.

Having “Missourians paying for little pieces of paper [renewable energy credits generated] from all over the world…will not change anything in Missouri,” she said.

Members of JCAR are working to schedule another meeting on the matter next week.

JCAR director Cindy Kadlec said the meeting could take place as early as Monday, but would more than likely be held Wednesday. More details were unavailable as of Friday afternoon.

-Rebecca Townsend contributed to this report