2012 Initiative Petitions
Approved for Circulation in Missouri
Statutory Amendment to RSMo Chapter 393, Relating to Renewable Energy, version 1.0a, 2012-129
Be it enacted by the people of the state of Missouri:
Six existing sections (i.e., Sections 393.1020, 393.1025, 393.1030, 393.1040, 393.1045 and 393.1050) are amended, and a new section (which it is suggested should be numbered Section 386.715) is added, collectively to read as follows:
393.1020. Sections 393.1025 and 393.1030 shall be known as the "Renewable Energy Standard". This act reflects the intent of the people of this state to reduce their reliance on fossil fuels and to promote the long term sustainability, security, and affordability of energy in this state by encouraging the development and utilization of renewable energy by Missouri utilities, businesses and residents.
393.1025. As used in sections 393.1020 to [393.1030] 393.1050, the following terms mean:
(1) "Commission", the public service commission;
(2) "Department", the department of natural resources;
(3) "Electric utility", any electrical corporation as defined by section 386.020;
(4) "[Renewable] Missouri renewable energy credit" or "MREC", [a tradeable certificate of proof that one megawatt-hour of electricity has been generated from renewable energy sources;] a certificate that is (i) offered as proof that one megawatt-hour of renewable energy has been generated subsequent to the effective date of this act from an identifiable renewable energy source and that that energy has either been procured by an electric utility for Missouri retail customers or generated by such customers, and (ii) independently validated by a third party in a manner approved by the commission; [and]
[(5) "Renewable energy resources", electric energy produced from wind, solar thermal sources, photovoltaic cells and panels, dedicated crops grown for energy production, cellulosic agricultural residues, plant residues, methane from landfills, from agricultural operations, or from wastewater treatment, thermal depolymerization or pyrolysis for converting waste material to energy, clean and untreated wood such as pallets, hydropower (not including pumped storage) that does not require a new diversion or impoundment of water and that has a nameplate rating of ten megawatts or less, fuel cells using hydrogen produced by one of the above-named renewable energy sources, and other sources of energy not including nuclear that become available after November 4, 2008, and are certified as renewable by rule by the department. ]
(5) “Net annual costs of compliance”, the electric utility’s net costs of procuring renewable energy in order to comply with this act in a calendar year, which costs would not have been incurred but for this act, calculated by deducting the “benefit credit” from the “compliance cost” with such credit and cost calculated as set forth in subsection 2 of section 393.1045 and subject to the annual maximum amount set forth in that subsection;
(6) "Procure", or "procurement", purchase of energy, generation of energy, and other means of acquiring energy;
(7) “Renewable compliance cost tracker” or “RCCT” means a tariff filed in accordance with subsections 2 through 4 of section 393.1045 that tracks the electric utility’s net annual costs of compliance;
(8) "Renewable energy", electric energy produced from renewable sources that operate in compliance with all state and federal environmental standards, and limited to the following technologies: wind turbines; solar thermal sources; photovoltaic cells and panels; hydropower (other than that excluded below); fuel cells using hydrogen produced by another renewable energy source; facilities that capture or use landfill gas; a project facility as defined in section 620.2300 RSMo; and other technologies used to produce electric energy, to the extent that such other technologies are certified as a renewable energy source in a rule adopted by the department or any successor agency after notice and hearing and consideration of the fuel type, technology, and environmental impacts; provided, however, that the term “renewable energy” shall not include energy from hydropower facilities that require a new diversion or impoundment of water or that have a total capacity rating of 10 megawatts or more (determined by adding the nameplate capacities of all individual generators at the facility), or any form of nuclear power;
(9) "Renewable energy compliance resource", renewable energy procured by an electric utility after the effective date of this act that would not have been procured but for this act, and does not include renewable energy procured by the electric utility from sources it owned or had under contract prior to the effective date of this act or renewable energy procured by the electric utility after that date through prudent planning and in the ordinary course of its business;
(10) “Retail customers”, those customers, as defined in an electric utility’s tariffs and reported on its Form 1 Annual Report (or successor report) filed with the Federal Energy Regulatory Commission, that receive electric energy services in Missouri from an electric utility;
(11) "Total retail electric sales", the megawatt-hours of electricity sold in a year by an electric utility to its retail customers as shown by the electric utility’s Form 1 Annual Report (or successor report) filed with the Federal Energy Regulatory Commission.
393.1030. 1. [The commission shall, in consultation with the department, prescribe by rule a portfolio requirement for all] All electric utilities [to generate or purchase] shall, subject to the provisions on compliance below, procure [electricity generated from] renewable energy for their retail customers [resources. Such portfolio requirement shall provide that] and such [electricity from] renewable energy [resources] shall constitute the following portions of each electric utility's total retail sales:
(1) No less than [two] five percent for calendar years  2014 through  2016;
(2) No less than [five] ten percent for calendar years  2017 through  2019;
(3) No less than [ten] fifteen percent for calendar years  2020 through  2022; [and]
(4) No less than [fifteen] twenty percent [in each calendar year beginning in 2021.] for calendar years 2023 through 2025; and
(5) No less than twenty-five percent in each calendar year beginning in 2026 and thereafter.
The percentages stated in this subsection represent baseline percentages and shall not prohibit electric utilities from utilizing additional renewable energy where prudent. Subject to the provisions herein, the electric utility shall demonstrate compliance by retiring the MRECs associated with the renewable energy it has procured for its retail customers. An MREC that is used to establish compliance must be associated with electric energy that the electric utility has procured for its retail customers from an identifiable renewable energy source. An MREC used by an electric utility to demonstrate compliance with this section can be associated with a renewable energy compliance resource, or with renewable energy procured by the electric utility from sources it owned or had under contract prior to the effective date of this act, or with renewable energy procured by the electric utility after that date through prudent planning and in the ordinary course of its business. In addition to the MRECs associated with the renewable energy that it procures for its retail customers, an electric utility may also purchase MRECs from another electric utility, or purchase MRECs from its retail customers that are operating renewable energy sources, and retire those purchased MRECs to demonstrate its own compliance with this renewable energy standard. This includes MRECs associated with the energy produced by solar facilities that receive incentives under subsection 3 below. If an electric utility is unable to procure sufficient renewable energy to meet the percentages stated above in a calendar year, it may demonstrate compliance by showing both (i) that it has retired the MRECs related to the renewable energy that it did procure during that year and (ii) that during that year it incurred a net annual cost of compliance equal to the annual maximum amount set forth in subsection 2 of section 393.1045. [At least two percent of each portfolio requirement shall be derived from solar energy. The portfolio requirements shall apply to all power sold to Missouri consumers whether such power is self-generated or purchased from another source in or outside of this state. A utility may comply with the standard in whole or in part by purchasing RECs. Each kilowatt-hour of eligible energy generated in Missouri shall count as 1.25 kilowatt-hours for purposes of compliance. ]
2. [The commission, in consultation with the department and within one year of November 4, 2008, shall select a program for tracking and verifying the trading of renewable energy credits. An unused credit may exist for up to three years from the date of its creation.] An MREC can be retired to demonstrate compliance only for the calendar year in which the energy identified with the MREC was generated or for the following two calendar years. [A credit] An MREC may be used only once to comply with sections 393.1020 to 393.1030 and may not also be used to satisfy any similar nonfederal requirement. An electric utility may not use [a credit] an MREC derived from a green pricing program. [Certificates] MRECs from net-metered sources shall initially be owned by the customer-generator. The commission, except where the department is specified, shall make whatever rules are necessary to enforce the renewable energy standard. Such rules shall include:
(1) [A maximum average retail rate increase of one percent determined by estimating and comparing the electric utility's cost of compliance with least-cost renewable generation and the cost of continuing to generate or purchase electricity from entirely nonrenewable sources, taking into proper account future environmental regulatory risk including the risk of greenhouse gas regulation] Provision for the tracking and recovery of the electric utility’s net annual costs of compliance as provided in section 393.1045;
(2) Penalties of [at least twice the average market value of renewable energy credits for the compliance period for failure to meet the targets of subsection 1. An electric utility will be excused if it proves to the commission that failure was due to events beyond its reasonable control that could not have been reasonably mitigated, or that the maximum average retail rate increase has been reached.] $200 per megawatt-hour for any shortfall if the electric utility cannot demonstrate compliance as required by this section. Penalties shall not be recovered from customers[. Amounts forfeited under this section shall be remitted to the department to purchase renewable energy credits needed for compliance. Any excess forfeited revenues shall be used by the department's energy center solely for renewable energy and energy efficiency projects];
(3) Provisions for an annual report to be filed by each electric utility in a format sufficient to document its progress in meeting the targets;
(4) [Provision for recovery outside the context of a regular rate case of prudently incurred costs and the pass-through of benefits to customers of any savings achieved by an electrical corporation in meeting the requirements of this section.] Provision for electric utilities to file plans for compliance with this renewable energy standard on or before March 31 in each of the years 2013, 2016, 2019, 2022, and 2025. Each compliance plan shall, at a minimum, cover a three year period, beginning with the calendar year immediately following the date of filing. This plan shall identify the renewable energy to be used to comply with the renewable energy standard over the plan period, separately identifying the renewable energy compliance resources, the renewable energy to be procured from sources that the electric utility owned or had under contract prior to the effective date of this act, and renewable energy to be procured in the ordinary course of the electric utility’s business. The plan shall also estimate the energy to be generated pursuant to the incentives required by subsection 3 of this section 393.1030, describe how any new amounts of renewable energy will be procured, and present an estimate of the net annual costs of compliance for each year of the compliance plan. The commission shall, after notice and hearing, accept, modify, or reject and order refiling of, such compliance plan. The commission as part of its review of a compliance plan may require an electric utility to use competitive bidding or other competitive processes for the procurement of resources, and specify the process to be used.
3. [Each electric utility shall make available to its retail customers a standard rebate offer of at least two dollars per installed watt for new or expanded solar electric systems sited on customers' premises, up to a maximum of twenty-five kilowatts per system, that become operational after 2009.] In furtherance of this renewable energy standard, each electric utility shall offer to its retail customers the following standard incentives for net metered solar energy generating systems that are installed or expanded after the effective date of this act to serve the retail customer’s premises. Until the end of 2013, the standard incentive for the first 25 kW installed per retail customer shall be two dollars per installed nameplate watt, and such standard incentive shall decrease by twenty cents per installed watt each calendar year thereafter and shall expire at the end of calendar year 2022. This incentive applies only to kW installed after the effective date of the act and only to those kW that do not increase the kW installed for the retail customer to a total of more than 25kW. For any kW installed after the effective date of this act which increases the kW installed for the retail customer to an amount over 25 kW and up to 100 kW, the standard incentive shall be one dollar per installed nameplate watt, decreasing by ten cents per installed watt for each calendar year thereafter, also expiring at the end of calendar year 2022. The total annual amount of the standard incentives shall not exceed twenty million dollars per year on a statewide basis, allocated among the electric utilities in proportion to the total number of retail customers served by each electric utility in the previous calendar year. If in any one calendar year, an electric utility does not expend all of its allocated proportionate share (including any annual carry-over amounts from previous years) such unexpended annual amount shall be added to the next year’s allocated proportionate share. Electric utilities shall meter, at the retail customer’s expense, electrical output from any systems receiving incentives under this section, and by paying such incentives shall acquire the rights to retire for compliance purposes an amount of MRECs equal to the estimated output for 10 years from kW installed with the above incentives. Retail customers accepting incentives offered under this section, whether paid directly to the customer or to a third party acting on behalf of such customer, shall maintain such systems for 10 years. In the case of systems that perform 15% or more below the estimated output of the system, the retail customer associated with such system shall reimburse the electric utility a prorated portion of the ten year annualized amount of the standard incentive previously paid by the electric utility to the retail customer, with such prorated amount to reflect the percentage of underperformance.
4. The department shall, in consultation with the commission, establish by rule a certification process for electricity generated from renewable [resources] sources and used to fulfill the requirements of subsection 1 of this section. Certification criteria for renewable energy generation shall be determined by factors that include fuel type, technology, and the environmental impacts of the generating facility. Renewable energy facilities shall not cause undue adverse air, water, or land use impacts, including impacts associated with the gathering of generation feedstocks. If any amount of fossil fuel is used with renewable energy [resources] sources, only the portion of electrical output attributable to renewable energy [resources] sources shall be used to fulfill the portfolio requirements.
[5. In carrying out the provisions of this section, the commission and the department shall include methane generated from the anaerobic digestion of farm animal waste and thermal depolymerization or pyrolysis for converting waste material to energy as renewable energy resources for purposes of this section.]
393.1040. 1. In addition to the renewable energy objectives set forth in sections 393.1025[,] and 393.1030, [and 393.1035, it is also the policy of this state to encourage electrical corporations to] electric utilities shall develop and administer all cost-effective energy efficiency [initiatives] and demand response programs as defined in section 393.1075 that reduce the annual growth in energy consumption and the need to build additional electric generation capacity. In developing cost-effective demand-response programs the electric utility shall include programs that can help manage variations in load and reduce the costs of integrating intermittent renewable sources into the electric grid.
2. Electric utilities shall analyze renewable energy sources during the integrated resource planning process on an equivalent basis with other sources of energy, taking into account the long-term hedge value provided by renewable energy given the uncertainty of future fuel costs and future regulatory costs associated with nonrenewable sources of energy, and also taking into account other relevant factors.
393.1045. [Any renewable mandate required by law shall not raise the retail rates charged to the customers of electric retail suppliers by an average of more than one percent in any year, and all the costs associated with any such renewable mandate shall be recoverable in the retail rates charged by the electric supplier. Solar rebates shall be included in the one percent rate cap provided for in this section.] 1. The commission shall promote the prudent and cost-effective procurement of renewable energy by providing for the recovery of the prudently incurred costs of such procurement. Electric utilities shall recover their prudently incurred net annual costs of compliance as provided in subsections 2 through 4 below.
2. An electric utility shall track its net annual costs of compliance through the RCCT that is further described in this subsection, and recover those costs after review in a general rate proceeding. Each electric utility shall file and maintain an RCCT that sets forth a mechanism for tracking and reporting its net annual costs of compliance. The net annual costs of compliance shall be calculated by first calculating the “compliance cost” as set forth in this section, then calculating and subtracting the “benefit credit” as set forth in this section. The “compliance cost” shall be calculated by adding together the electric utility’s prudently incurred costs of procuring renewable energy compliance resources (including, where applicable, the return on ratebase approved in the electric utility’s most recent rate case, related income and other taxes, operating and maintenance expenses, depreciation expense, and the cost of purchasing energy); costs of purchasing MRECs under subsection 1 of Section 393.1030; incentives or rebates paid by the electric utility to its retail customers for the purpose of encouraging investment in renewable energy sources (including those paid under subsection 3 of section 393.1030); any additional transmission and ancillary costs associated with procuring renewable energy compliance resources, and other costs of procuring such renewable energy compliance resources that the electric utility would not have incurred but for this act. The “benefit credit” shall be calculated by adding the estimated market value of the renewable energy compliance resources procured during the compliance year; any revenues that the electric utility receives from the sale of MRECs under subsection 1 of section 393.1030; any federal or state tax credits, grants, subsidies, or other like credits related to such renewable energy compliance resources that reduce the electric utility’s costs of acquiring such renewable energy compliance resources (but only to the extent that such credits, grants, or subsidies have not already been subtracted in calculating compliance cost), and any other quantified benefit that reduces the costs paid by retail customers and is specified in a rule adopted by the commission. An electric utility shall not recover, or be required to incur, net annual costs of compliance that exceed the amount that would be generated if the electric utility were to charge its retail customers, other than outdoor lighting customers, the following maximum amounts per month: for those nonresidential customers with a maximum demand greater than 100kW, $150 per retail customer; for those nonresidential customers with a maximum demand of 100kW or less, $11 per retail customer; and for residential customers, $3 per retail customer. If the total costs to be recovered are less than what would be produced by these maximum customer charges, the amount allocated to each customer class shall, to the extent practicable, be reduced by an equal percentage so that the amount to be collected from all customers equals the net annual costs of compliance to be recovered. Those amounts shall be tracked by customer class.
3. In any general rate proceeding where the recovery of the net annual costs of compliance is at issue, a determination will be made of the period of time over which such costs will be amortized. The amounts to be collected from those nonresidential customers with a maximum demand greater than 100 kW shall be recovered on an equal amount per customer basis, and the amounts to be recovered from those nonresidential customers with a maximum demand of 100kW or less and residential customers shall be recovered on a basis that reflects different levels of usage within the class. The charges that collect such amounts from each customer class shall be set forth on the applicable tariff sheets. Nothing in this section 393.1045 shall preclude the electric utility from recovering from its retail customers the electric utility’s prudently incurred costs associated with renewable energy resources other than the renewable energy compliance resources whose costs are included in the calculation of the net annual costs of compliance.
4. The commission shall by rule establish procedures for the tracking and recovery of the net annual costs of compliance, and for ensuring that those costs do not exceed the annual maximum amount set forth in subsection 2. The commission shall also by rule establish procedures for determining the market value of energy to be used in calculating the benefit credit under subsection 2, and procedures to periodically review the prudency of the costs recovered through the RCCT. The commission shall initiate this rulemaking proceeding within 30 days of the effective date of this act by filing a notice of proposed rulemaking with the Secretary of State, and a final order of rulemaking of the commission shall be entered within 270 days of the effective date of this act.
5. The commission may, after notice and hearing, make decisions in specific cases that, where appropriate, provide earning opportunities for electric utilities associated with their procurement of renewable energy such as, but not limited to, the creation and amortization of a regulatory asset.
6. In rate proceedings, when evaluating the prudence and reasonableness of an electric utility’s investment in any nonrenewable energy resources that were not in existence prior to the effective date of this act, the commission shall consider (i) the electric utility’s compliance with its obligations to procure renewable energy under this act, (ii) the electric utility’s implementation of cost-effective energy efficiency and demand response programs; and (iii) the cost of the nonrenewable resource as compared to the cost of renewable energy and demand-side programs that were cost-effective and available to the electric utility. The commission shall disallow those costs that it finds to have been imprudently incurred.
7. Prior to procuring renewable energy, an electric utility may request a determination from the commission, either at the time of filing its compliance plan or by separate petition, that that particular procurement of renewable energy is prudent at the time of such determination. Any such determination shall be made following notice and hearing, and shall lapse two years after it is made if the procurement that was approved does not take place during such period.
393.1050. [Notwithstanding any other provision of law, any electrical corporation as defined by subdivision 15 of section 386.020 which, by January 20, 2009, achieves an amount of eligible renewable energy technology nameplate capacity equal to or greater than fifteen percent of such corporation's total owned fossil‑fired generating capacity, shall be exempt thereafter from a requirement to pay any installation subsidy, fee, or rebate to its customers that install their own solar electric energy system and shall be exempt from meeting any mandated solar renewable energy standard requirements. Any disputes or denial of exemptions under this section may be reviewable by the circuit court of Cole County as prescribed by law.] 1. The Office of Public Counsel shall automatically be a party to any rulemaking, contested case, or other proceeding initiated under this act.
2. The commission shall have the authority to adopt such rules as it deems necessary to enforce the provisions of sections 393.1020 through 393.1050. This includes, but is not limited to, the rules specifically provided for in sections 393.1025 through 393.1045. The rules relating to ex parte contact with the commission that apply to contested cases shall also apply in any such rulemaking proceeding. Any rule adopted by the commission pursuant to this grant of rulemaking authority shall not be subject to the review provisions of sections 386.125, 536.028, and 536.037, or any other provision of Chapter 536 or any other statute or section that would provide for nonjudicial review of such rules, but shall only be subject to judicial review pursuant to sections 386.500 through 386.540.
386.715. 1. Consistent with the exercise of discretion in section 386.710 RSMo, and in furtherance of its responsibility to advocate for just and reasonable rates for Missouri public utility customers, the Office of Public Counsel shall be a party to the rate, rulemaking, and contested case proceedings required under sections 393.1020 through 393.1050. In order to ensure that the public counsel has adequate and fair funding to carry out its new duties with respect to ensuring compliance with the Missouri Renewable Energy Standard and the other provisions of sections 393.1020 through 393.1050, in addition to its other duties, and in order to ensure that responsibility for funding such new duties does not unfairly fall on gas corporations, water corporations, heating companies, telephone corporations, telegraph corporations, sewer corporations, and other public utilities as defined in section 386.020, funding for the public counsel shall be as set forth in this section.
2. The public counsel shall, prior to the beginning of each fiscal year, make available to the commission an estimate of the expenses to be incurred by the public counsel during such fiscal year, reasonably attributable to his or her responsibilities under sections 386.700 through 386.715 and shall also separately estimate the amount of such expenses directly attributable to such responsibilities with respect to each of the following groups of public utilities: electrical corporations, gas corporations, water corporations, heating companies, telephone corporations, telegraph corporations, sewer corporations, and any other public utility as defined in section 386.020, as well as the amount of such expenses not directly attributable to any such group.
3. The public counsel shall allocate to each such group of public utilities the estimated expenses directly attributable to his or her responsibilities under sections 386.700 and 386.710 with respect to such group and an amount equal to such proportion of the estimated expenses not directly attributable to any group as the gross intrastate operating revenues of such group during the three preceding calendar years bears to the total gross intrastate operating revenues of all public utilities subject to the jurisdiction of the commission during such calendar years. The amount allocated to telephone corporations shall not exceed three percent of the total estimated expenses directly attributable to the public counsel’s responsibilities under sections 386.700 through 386.715. The commission shall then assess, on behalf of the public counsel, the amount so allocated to each group of public utilities subject to the reduction for telephone corporations as provided in this section, to the public utilities in such group in proportion to their respective gross intrastate operating revenues during the preceding calendar year. The total amount assessed shall not exceed six-hundredths of one percent of the total of the utilities’ gross intrastate operating revenues. Nothing in this section shall authorize the commission to determine how the public counsel allocates the estimated expenses directly attributable to his or her responsibilities under sections 386.700 through 386.715 or how the assessment imposed under this section is spent by the public counsel.
4. On behalf of the public counsel, the commission shall render a statement of such assessment to each such public utility on or before July first and the amount so assessed to each such public utility shall be paid by it to the director of revenue in full on or before July fifteenth next following the rendition of such statement, except that any such public utility may at its election pay such assessment in four equal installments not later than the following dates next following the rendition of such statement, to wit: July fifteenth, October fifteenth, January fifteenth, and April fifteenth. The director of revenue shall remit such payments to the state treasurer.
5. The state treasurer shall credit such payments to a special fund, which is hereby created, to be known as "The Public Counsel Fund", which fund, or its successor fund created under section 33.571, shall be devoted solely to the payment of expenditures actually incurred by the public counsel and attributable to his or her responsibilities under sections 386.700 through 386.715. Any amount remaining in such special fund or its successor fund at the end of any fiscal year shall not revert to the general revenue fund, but shall be applicable to the payment of such expenditures of the public counsel in the succeeding fiscal year and shall be applied by the public counsel to the reduction of the amount to be assessed to such public utilities in such succeeding fiscal year, such reduction to be allocated to each group of public utilities in proportion to the respective gross intrastate operating revenues of the respective groups during the preceding calendar year.
6. In order to enable the public counsel to make the allocations and assessments provided for in this section, each public utility subject to the jurisdiction of the commission shall file with the commission on or before March thirty-first of each year, a statement under oath showing its gross intrastate operating revenues for the preceding calendar year, and if any public utility shall fail to file such statement within the time established in this subsection, the commission shall estimate such revenue. Such estimate shall be binding on such public utility for the purpose of this section.