Note: The Missouri Public Service Commission (PSC) is in the process of developing administrative rules for implementation of the Renewable Electricity Standard. The program website listed at the top of this page links to the PSC's rule making docket (Case No. EW-2009-0324), which contains draft rule proposals, comments, and other related documents.
In November 2008 voters in Missouri enacted Proposition C, a ballot initiative that repealed the state’s existing voluntary renewable energy and energy efficiency objective and replaced it with an expanded, mandatory renewable electricity standard of 15% by 2021. The standard also contains a solar electricity carve-out of 2% of each interim portfolio requirement meaning that by 2021, 0.3% of retail electricity sales must be derived from solar electricity.
Like the prior voluntary objective, the new standard applies only to the state’s investor-owned utilities* and does not place any requirements on municipal utilities or electric cooperatives. Energy efficiency measures are no longer eligible to be counted towards compliance with the standard, although sections directing state policy to “encourage” energy consumption reduction remain in effect.
The definition of eligible renewables includes electricity produced using solar photovoltaics; solar thermal; wind; small hydropower; biogas from landfills and wastewater treatment plants; various forms of biomass; fuel cells using hydrogen from renewable resources; and other renewable-energy resources approved by the Missouri Department of Natural Resources (DNR). Eligible hydropower facilities must have a capacity of 10 megawatts (MW) or less and not require new water diversions or impoundments. Cofiring is permitted, but only the percentage of electricity generated by an eligible renewable resource can be counted towards a utility's renewable energy obligation. Pumped storage hydropower and nuclear energy are specifically identified as ineligible.
The standard sets the following minimum benchmarks for electric utilities based on their annual electricity sales:
- 2% from 2011 to 2013 (0.04% solar)
- 5% from 2014 to 2017 (0.1% solar)
- 10% from 2018 to 2020 (0.2% solar)
- 15% for 2021 and thereafter (0.3% solar)
Compliance with the objective can be achieved through the procurement of renewable energy or renewable energy credits (RECs). RECs will have a lifetime of 3 years. In-state renewable energy generation receives a multiplier of 1.25 compared to out-of-state generation (i.e., in-state generation is worth 25% more for compliance purposes). The Missouri Public Service Commission (PSC), in consultation with the DNR, is required to select an REC tracking and verification program within one year of the standard’s enactment. Owners of net-metered systems retain title to RECs derived from energy produced by the system.
Utilities that do not meet their portfolio obligations under the standard are subject to penalties of at least twice the market value of RECs. The revenue associated with such penalties will be used by the DNR to purchase RECs for compliance, with any excess revenue used to fund renewable energy and energy efficiency projects. Costs associated with non-compliance penalties may not be recovered from ratepayers. Utilities may be excused from their obligation by the PSC for events beyond their control or if the cost of compliance with the standard increases retail electricity rates by more than 1%. The PSC is also authorized to develop rules for annual reporting and rate recovery under the program.
The law also requires utilities with renewable energy obligations under the standard to offer rebates of at least $2 per watt for customer-sited solar electric systems of 25 kilowatts (kW) or less beginning in 2010.
History
In June 2007 Missouri enacted
S.B. 54, creating a voluntary renewable energy and energy-efficiency objective for the state's investor-owned utilities. The objective required each utility to make a "good-faith effort" to generate or procure renewable electricity equivalent to 4% of total retail electric sales by 2012, 8% by 2015, and to 11% by 2020. Utilities could also receive credit towards the objective for verifiable reductions in energy consumption resulting from measures implemented by utilities and electricity consumers.
*Prior to Proposition C ballot initiative, in July 2008 the Missouri legislature enacted legislation (S.B. 1181) providing an exemption from the (yet to be enacted) renewable energy standard and solar rebate offer requirement for any utility that had achieved eligible renewable energy technology nameplate capacity equal to or greater than 15% of the utility's total owned fossil-fired generating capacity by January 20, 2009. Empire District Electric, one of Missouri's four investor-owned utilities, has indicated that it qualifies for this exemption. The 1% retail cost cap for the standard was also contained in this legislation.
