HCS SS SCS SB 376 -- ENERGY

SPONSOR:  Lager (Bivins)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Energy and
Environment by a vote of 11 to 1.

This substitute establishes the Missouri Energy Efficiency
Investment Act and changes the laws regarding the purchase of
appliances with state funds, utility company rate adjustments,
and energy assistance.

MISSOURI ENERGY EFFICIENCY INVESTMENT ACT

The Missouri Energy Efficiency Investment Act is established
which requires the Missouri Public Service Commission to allow
electric corporations to implement and recover costs related to
commission-approved energy efficiency programs aimed at
customers.  In its main provisions, the substitute:

(1)  Requires the commission to develop cost recovery methods
that value energy efficiency investments equal to or better than
traditional supply-side investments by the company;

(2)  Requires any cost recovery method to take into account lost
energy sales associated with energy efficiency;

(3)  Allows the commission to reduce or exempt energy efficiency
costs for low-income customers and caps the amount that a
customer of any rate class must pay at $5,000 per month;

(4)  Requires the commission to establish rules to require any
customer using more than 2,500 kilowatts seeking an exemption
from the provisions of the act to demonstrate that the customer
has a comprehensive energy efficiency initiative in place that is
funded using financial criteria similar to the total resource
cost test and to demonstrate an achievement of savings as
determined by the commission;

(5)  Requires the commission to provide oversight and allows it
to adopt rules and procedures and to approve certain settlements
and tariff provisions to ensure that electric corporations
achieve the goals of the substitute; and

(6)  Requires every electric corporation to submit an annual
report to the commission on its energy efficiency programs in the
previous year.

PURCHASE OF APPLIANCES WITH STATE FUNDS

The substitute requires any appliance purchased with state funds
to have earned the Energy Star rating under the federally
sponsored Energy Star Program.  The Commissioner of the Office of
Administration is allowed to exempt an appliance from the
requirement if the cost of compliance is expected to exceed the
projected energy cost savings.

UTILITY COMPANY RATE ADJUSTMENTS

Currently, rate adjustments in the purchase price of natural gas
which have been approved by the Missouri Public Service
Commission are exempt from certain provisions regarding business
license taxation.  The substitute allows any adjustments to
include the gas cost portion of net write-offs incurred by a gas
corporation in providing service to its customers.  Any write-off
may only be recovered once through the gas corporation's
purchased gas adjustment rates.  A true-up of the gas cost
portion of net write-offs is required once every year, and the
commission must annually review a gas corporation's records to
ensure that it is prudently pursuing the moneys owed by its
customers.

The substitute increases from three to five years the period of
time that a gas corporation is able to collect an infrastructure
system replacement surcharge without holding a general rate
proceeding before the commission.

An electric corporation is allowed to file a petition and
proposed rate schedule with the commission to establish or change
infrastructure system replacement surcharges (ISRS) rate
schedules that will allow for the adjustment of the corporation's
rates and charges for the recovery of costs for eligible
infrastructure system replacements.  The commission cannot
approve an ISRS if it would produce total annualized ISRS
revenues below the lesser of $1 million or 0.5% of the
corporation's base revenue level approved by the commission in
the corporation's most recent general rate proceeding or if it
would produce total annualized ISRS revenues exceeding 10% of the
corporation's base revenue level approved at the most recent
general rate proceeding.  The period of collection on an ISRS is
limited to five years, but may be extended if the corporation has
filed for or is the subject of a new general rate proceeding.

The substitute specifies the procedures for the application and
hearing as well as the accounting methods and procedures to be
used for the surcharges.

ENERGY ASSISTANCE

The substitute specifies that any qualified individual receiving
energy assistance through the Utilicare Program or the federal
Low Income Energy Assistance Program will be eligible for an
assessment of additional needs and must be encouraged to attend
any appropriate energy efficiency workshop, financial management
workshop, or any other educational program conducted by a
community action agency or other specified public or nonprofit
entity.

Energy providers must allow consumers who have an arrearage on
their account during the cold weather rule period but have not
yet been disconnected to retain service by paying one-third of
the arrearage plus the current charges in the next three months.

The provisions regarding the purchase of appliances with state
funds will expire August 28, 2011.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of $125,715
in FY 2010, $153,531 in FY 2011, and $158,139 in FY 2012.
Estimated Cost on Other State Funds of $59,538 in FY 2010,
$69,631 in FY 2011, and $71,720 in FY 2012.

PROPONENTS:  Supporters say that the bill will lead to greater
energy efficiency throughout the state, will result in less
energy consumption and lower energy costs, and will extend or
eliminate the need for additional energy production facilities.

Testifying for the bill were Senator Lager; Kansas City Power and
Light; Anheuser Busch, Incorporated; Ford Motor Company; Diana
Vuylsteke; AARP; Consumers Council of Missouri; Greater Kansas
City Chamber of Commerce; Missouri Association for Social
Welfare; Sierra Club; Office of Public Counsel; and Midwest
Alliance for Renewable Energy.

OPPONENTS:  Those who oppose the bill say that allowing the
largest energy consumers in the state to seek exemption from the
plan is unfair and problematic logistically and financially.

Testifying against the bill was Ameren UE.

OTHERS:  Others testifying on the bill say that the exemption
provision for some energy consumers should not be included in the
bill.

Testifying on the bill was Missourians for a Balanced Energy
Future.

Missouri House of Representatives
95th General Assembly, 1st Regular Session
Last Updated November 17, 2009 at 9:26 am