Writing rules for renewable energy compliance

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Writing rules for renewable energy compliance
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Missouri voters overwhelmingly approved a renewable-energy mandate known as Proposition C two years ago. The 2008 Proposition C is not to be confused with the 2010 “no individual health care mandate” that passed earlier this month.

The 2008 proposition requires large electric utilities to obtain 15 percent of the electricity that they sell from renewable sources, such as wind or solar, by 2021.

It also contains a “circuit breaker” — a provision that limits the financial impact of the renewable-energy mandate on ratepayers. Electric rates can rise no more than 1 percent a year.

Seems relatively simple, doesn’t it? But when it came time to write the rules, things got a lot more complicated.

Supporters talked up Proposition C as a way to encourage alternative energy and create thousands of green jobs.

The implication was that utilities would obtain that renewable power from windmills, solar arrays or hydroelectric stations in Missouri, or at least in adjacent states.

But that’s not exactly what the initiative says. It seems to permit utilities to meet their obligations under the law simply by buying “renewable energy credits,” or RECs. They represent a subsidy that reduces the price of renewable energy so it is more competitive with energy generated from fossil fuels.

In theory, Missouri utilities meet Proposition C’s mandates by buying a whole bunch of RECs — from renewable energy sources elsewhere in the country — without actually bringing a single watt of renewable power to Missouri customers.

That may comply with the law, but not with voters’ expectations. In fact, it defeats the whole purpose of a state renewable-energy standard.

In June, the Public Service Commission finalized new rules that say Missouri utilities cannot use RECs to comply the renewable energy mandate. Instead, the PSC’s rules would have required utilities to buy actual renewable energy from Missouri sources or prove that actual renewable energy generated in an adjacent state had been purchased for customers here.

That was the right decision, but it probably comes at a price. Buying RECs is cheaper than building or buying power from renewable generating facilities in Missouri or a neighboring state.

The PSC’s new rules had to be approved by a legislative committee. Last month, that committee endorsed all of it — except the so-called “geographic sourcing” rule that required utilities to get their renewable power from inside Missouri.

The rules now move to the full Legislature, which will vote on them early next year.

We’d like to think that lawmakers would uphold the intentions of voters and side with the PSC. But history suggests that is not how things will play out.

In 2008, after Prop C supporters had submitted enough signatures to get their measure on the ballot, lawmakers approved a separate bill that green-energy advocates feared was an attempt to circumvent the initiative.

It renumbered all of the statutes that Proposition C was poised to change, creating doubt about exactly which sections of the law were being modified. And it imposed a separate 1 percent cap on annual utility rate increases. That raises questions about how much utility rates can increase.

Is the total cap 2 percent — 1 percent for renewable costs and another 1 percent for all other increases? Or should it be read as a 1 percent overall cap? That matter seems certain to be argued in court.

Here’s a radical idea: Lawmakers could give deference to the wishes of voters instead of the dictates of lobbyists.

That means sticking with the rules the PSC approved in June. Proposition C was meant to encourage renewable energy in Missouri, not subsidize it for electric customers in other states.

Copyright 2012 STLtoday.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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