HCS SCS SB 1181, 1100, 1262 & 1263 -- ENERGY REGULATION

SPONSOR:  Engler (Schoeller)

COMMITTEE ACTION:  Voted "do pass" by the Special Committee on
Utilities by a vote of 9 to 1.

This substitute changes the laws regarding energy regulation.  In
its main provisions, the substitute:

(1)  Requires up to 10% of the funds appropriated to the
Facilities Maintenance Reserve Fund to be used for energy
projects with a 10-year or less payback period;

(2)  Requires the Department of Natural Resources to establish
minimum energy efficiency standards for new and substantially
renovated state buildings with over 5,000 square feet based on
the International Energy Conservation Code 2006.  State buildings
beginning construction or renovations on or after July 1, 2009,
must meet the new standards.  The Office of Administration will
determine whether the energy efficiency standard is met and may
exempt buildings based on safety or cost considerations;

(3)  Allows low-interest loans through the Linked Deposit Loan
Program for eligible alternative energy operations producing and
selling fuel or power from alternative energy sources including
solar, hydroelectric, wind, and qualified biomass;

(4)  Authorizes an income tax deduction, beginning January 1,
2009, administered by the department for the cost of home energy
audits and implementing audit recommendations.  The deduction is
limited to $1,000 per taxpayer per year or $2,000 for taxpayers
filing combined returns;

(5)  Establishes the Show Me Green Sales Tax Holiday beginning in
2009 and every year thereafter.  Energy Star certified
appliances, up to $1,500 per appliance, will be exempt from state
sales taxes from April 19 through April 25.  Political
subdivisions may opt in at their discretion;

(6)  Requires representatives from the departments of Labor and
Industrial Relations, Elementary and Secondary Education,
Agriculture, Economic Development, and Natural Resources to meet
at least twice a year to collaborate to secure grants established
under the federal Energy Independence and Security Act of 2007.
The Department of Natural Resources will coordinate the
inter-agency group, and the group will annually report to the
Governor and General Assembly on the grants secured no later than
the first Wednesday after the first Monday in January;

(7)  Requires the Missouri Energy Task Force to reconvene at
least annually to review progress made toward meeting the
recommendations of its final report and issue an annual status
report to the Governor and General Assembly by December 31;

(8)  Designates the Energy Center of the Department of Natural
Resources as a coordinator for energy sustainability activities
in the state;

(9)  Establishes the Renewable Energy Information and Reporting
Act which requires the Missouri Public Service Commission to
provide an annual report on renewable energy trends and new
developments to the Governor, General Assembly, any public
interest group interested in energy and the environment, and all
entities in the energy industry.  The report's requirements are
specified in the substitute;

(10)  Authorizes the commission to grant approval, which will
have the same effect as approval granted prior to construction of
an electric generating facility, to an existing electric
generating facility if the commission determines that the
approval is necessary or convenient for the public service.
Retroactive approval will not invalidate or otherwise alter
existing civil cases.  The power to grant this retroactive
approval expires on August 28, 2009;

(11)  Requires purchased gas adjustment rates to include the gas
cost portion of net write-offs incurred by a gas corporation in
providing service to its customers as part of rate adjustments in
the purchase price of natural gas approved by the commission.
These write-offs will not count as tariff increases for the
purpose of the gas corporation's revenue notification
requirements to cities and counties in Section 393.275, RSMo;

(12)  Requires purchasers of scrap metal to keep a record of each
transaction including a copy of a federal or state-issued form of
identification from the seller, the date and time of delivery,
and the description and weight of all metals purchased.  Scrap
metal includes any aluminum, copper, brass, or bronze wire;
cable; pipe; tubing; bar; ingots; rod; fitting; or fastener.
Records are required to be kept for a minimum of 24 months and
must be available for inspection by law enforcement.  Any person
violating this provision will be guilty of a class A misdemeanor.
Transactions not exceeding $50 or transactions between scrap
metal dealers with fixed business locations are exempt from the
record-keeping requirement;

(13)  Requires scrap metal dealers to make any payment over $500
by check, electronic transfer, or any other method in which a
financial institution maintains a record of the transaction;

(14)  Prohibits scrap metal dealers from purchasing metal beer
kegs of six gallons or more unless purchasing them from the
brewer or its representative.  Any person violating this
provision will be guilty of a class A misdemeanor punishable only
by fine;

(15)  Prohibits scrap metal dealers from purchasing items such as
manhole covers, street signs, bleachers, or guardrails that are
identifiable as belonging to a political subdivision, electric
cooperative, or utility.  Any person violating this provision
will be guilty of a class B misdemeanor;

(16)  Allows electric suppliers to trim, remove, and control
trees and vegetation that threaten the safe and reliable
operation of electrical service.  Permissible distances from
power lines for removing trees are specified based on the voltage
of the power line.  Any tree that actually threatens the power
supply may be trimmed or removed after a 14-day notice to the
owner even if the tree is not within the recommended distance
guidelines unless the electric supplier determines that removal
of the tree is immediately necessary or the electric supplier is
trimming or removing trees following a major weather event or
other emergency situation.  If any tree which is trimmed by an
electric supplier dies within three months as a result of the
trimming, the owner may request in writing that the electric
supplier remove the tree at the supplier's expense.  The electric
supplier must respond to the request within 90 days;

(17)  Creates penalties for corporations, persons, and public
utilities that violate any law, order, decision, decree, rule,
direction, demand, or requirement of the Missouri Public Service
Commission relating to federally mandated natural gas safety
standards.  Municipalities that own gas plants are only liable
for violations of natural gas safety laws, rules, and orders.
The maximum penalty per violation will be $15,000, and the
maximum penalty for multiple violations or a continuing violation
of the same rule will be $150,000; beginning January 1, 2015, the
maximum penalties will be $20,000 and $200,000; beginning
January 1, 2025, the maximum penalties will be $25,000 and
$250,000; beginning January 1, 2035, the maximum penalties will
be $30,000 and $300,000; and beginning January 1, 2040, the
maximum penalties will be $40,000 and $400,000.  In determining
penalty amounts, the commission may consider the degree of
culpability, prior violations, the effect of the penalty on
operations, good faith efforts at compliance, ability to pay, and
any other matters deemed relevant.  The acts and omissions of
officers, agents, and employees of any corporation, person,
public utility, or other owner of a gas plant will be considered
the acts or omissions of the gas plant owner;

(18)  Increases, from $600 to $800, the maximum allowable funding
for households eligible to receive financial assistance for
heating and cooling expenses from the Utilicare Stabilization
Fund, administered by the Department of Social Services per
household per fiscal year and makes the funding mandatory.  The
stabilization fund will be subject to appropriations rather than
the current $5 million cap;

(19)  Creates a sales tax holiday from June 27, 2008, through
June 29, 2008, for certain energy efficient products.  All
products $600 or less in price are eligible and the first $1,500
spent on energy efficient products during the tax holiday will be
tax free;

(20)  Prohibits gas and electric providers from June 1 to
September 30 from disconnecting service to residential customers
on days when the temperature is expected to rise above 95 degrees
Fahrenheit or the heat index is expected to rise above 105
degrees Fahrenheit for the following 24-hour period or on days
when service personnel will not be able to reconnect service and
the temperature or heat index is expected to rise to the
regulated levels;

(21)  Allows the Department of Natural Resources to implement a
unified permit schedule process for applicants who need multiple
permits for a similar activity or project.  The department may
waive otherwise applicable procedural requirements for permits
and establish a schedule for issuing permits to an applicant.
Considerations for determining the timing of the unified permit
schedule are specified in the substitute.  Public comment periods
and substantive legal requirements cannot be waived by the
department to facilitate the new scheduling process;

(22)  Creates the Studies in Energy Conservation Fund to be used
for professorships in energy efficiency and conservation at
public state universities.  The professorships will be
administered by the Department of Higher Education in
coordination with the Department of Natural Resources.  Funding
for the positions is subject to appropriations;

(23)  Expands the authority of the counties of Clay and Jefferson
to include the adoption of regulations for electrical wiring and
its installation and the licensing of individuals to make them
consistent with the authority granted to all other first and
second classification counties.  Currently, these counties are
authorized, without voter approval, to adopt building and
construction regulations; require building permits; license
certain building contractors; require inspections; establish and
collect fees for permits, licenses, and inspections; and appoint
a building commission to oversee these regulations, permits,
licenses, and inspections;

(24)  Requires a regional electric cooperative that provides
service to two or more municipalities within Missouri to allow
the municipalities to appoint at least four members to its
governing board.  Appointments will be made by a majority vote of
the mayors of the municipalities served by the cooperative, and
the individuals appointed will have the same rights and benefits
as other members of the board and be subject to Section 394.140.
The provisions of the substitute may be enforced by an injunction
prohibiting any regional electric cooperative who fails to comply
with any of the requirements of the substitute from operating
within Missouri; and

(25)  Requires school districts, beginning in the 2009-2010
school year, to establish a "green" cleaning policy to promote
environmentally sensitive cleaning products, unless the policy
would result in an increase in the cleaning costs of the
district.  The Department of Elementary and Secondary Education,
in consultation with the Department of Health and Senior Services
and other interested parties, will establish annual guidelines
for green cleaning programs and product specifications, beginning
February 24, 2009, for distribution to the districts and also
will post the guidelines on the Department of Elementary and
Secondary Education's web site.

The provisions of the substitute regarding the income tax
deduction for home energy audits expire December 31, 2013.

The substitute contains an emergency clause for the provisions
regarding the sales tax holiday for energy efficient goods.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of Up to or
Greater than $18,778,214 in FY 2009, Up to or Greater than
$1,805,733 in FY 2010, and Up to or Greater than $1,832,651 in
FY 2011.  Estimated Cost on Other State Funds of Unknown in
FY 2009, FY 2010, and FY 2011.

PROPONENTS:  Supporters say that the bill will make state
buildings more energy efficient, improve federal grant
opportunities, and encourage low-interest loans for environmental
projects.  It should save the state in energy costs.

Testifying for the bill were Senator Engler; Department of
Natural Resources; Missouri Retailers Association; Missouri
Energy Development Association; Thomson Incorporated; and
Missouri Association for Community Action.

OPPONENTS:  There was no opposition voiced to the committee.

OTHERS:  Others testifying on the bill say that appliance
standards should be set by federal law and that many proposed
state standards would be preempted.

Testifying on the bill was Multi-State Associates, Incorporated
on behalf of Consumers Electronics Association.

Missouri House of Representatives
94th General Assembly, 2nd Regular Session
Last Updated October 15, 2008 at 3:13 pm