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After months of difficult negotiations, Missouri’s second-largest energy-efficiency program on Wednesday won approval from state regulators.
However, a couple of lawyers involved in discussions of the plan had vastly different assessments of the outcome. The plan aims to save 383 gigawatt hours of electricity – enough to power 30,000 typical Missouri homes – over the next three years.
“I would say this is a real win,” said Andrew Linhares, an attorney who represented Renew Missouri in the protracted tussle between Kansas City Power & Light and the various interested parties. “The fact that we’re over the finish line, and having over $250 million in investments (by Missouri’s two largest utilities) over three years….We think that’s really positive.”
Henry Robertson, an attorney representing the Natural Resources Defense Council in the discussions, was less enthusiastic.
He was willing only to concede that, “These programs are better than none.” The state’s largest utility, Ameren Missouri, three weeks ago received the commission’s approval of a plan it revised after the commission rejected the initial version.
As to whether the two programs meet the state’s directive that they achieve “all cost-effective demand-side savings,” Robertson said they are “nowhere close” to that. Robertson said he thinks KCP&L is trying to cut its customers’ electricity use by about .8 percent annually for the next three years. KCP&L would not provide a figure.
“We think they’re capable of 1 percent or more,” Robertson said. “In some states, the utilities are realizing 2 or 3 percent. Missouri has a long way to go.”
The efficiency plans were developed in response to the Missouri Energy Efficiency Investment Act, a law that suggests, but does not require, that utilities adopt policies aimed at cutting their sales of power. Robertson pointed out that Missouri’s gentle nudge towards greater efficiency means “you don’t have as much leverage as states that have a mandatory energy-efficiency standard.”
Rental housing
Even given KCP&L’s relatively modest goals, clean-energy supporters found pieces of it to like. As with Ameren, KCP&L is instituting a system aimed at encouraging efficiency improvements in multi-family and low-income housing units.
“This piece is really close to our hearts,” Linhares said. “Renters and low-income people have been left out of energy efficiency. There’s no incentive for owners to make their buildings more efficient because they don’t pay the utility bills. There’s no incentive for the renters to make improvements because they don’t own the unit.”
KCP&L will encourage owners of multifamily structures to invest in efficiency improvements in the common areas of their buildings. And it will streamline and simplify the process for owners and renters by designating a point person to handle efficiency inquiries and applications.
“We think this does a lot to get us there,” Linhares said.
The utility also, upon request, will provide owners of certain large buildings with data about their energy use. Kansas City last year passed an ordinance requiring owners of large buildings to monitor their property’s energy use. But since KCP&L serves a territory that extends far beyond the city limits, the utility’s efficiency plan makes such information more broadly accessible.
Robertson said that energy-usage information “is important because even if they don’t have to do anything with it, it lets owners realize they have opportunities to save money.”
He expressed some concern that the utility will provide the information only if requested.
“Unless they really publicize it,” he said, “it probably will have limited impact.”
A way out
Advocates said that one of the plan’s more troublesome components is a provision that streamlines the process for terminating the program early – after, say, one year. That was one of the foremost “sticking points” during the last year’s negotiations, Linhares said.
The new policy would allow the company to terminate the efficiency program 30 days after alerting stakeholders. But since utilities do earn substantial profits from operating efficiency programs, Linhares said he is confident KCP&L will retain theirs.
Asked why the utility might terminate its program, Linhares said, “They wouldn’t, and they won’t.”
Robertson wasn’t so certain.
“They testified that there are things that might happen that would cause them to cancel it,” he said. Things such as the Clean Power Plan. Since the plan has been challenged and is now before a federal court, efficiency savings made in the next year or two might not count toward meeting the power plan’s mandated carbon reductions. Therefore, Robertson suggested, a utility might wish to postpone efficiency measures until the power plan actually goes into effect.
Next steps
Linhares said he was pleased that the utility agreed to join in an appraisal of the program’s first year, and to consider revisions for 2017 and 2018.
The plan approved by the commission states that “the signatories agree to work together to identify strategies to maximize savings in a cost-effective manner and to determine the feasibility of implementing additional programs or savings.”
Discussions could aim at adding as many as 200 gigawatts to the savings goal, and could assess changes to lighting and appliance efficiency standards and the use of whole-building benchmarking as a tool, for example.
Linhares said it’s possible that “we will be able to bring in strategies for savings, and more approaches that might help us take the next step.”
Negotiations likely will resume in June.
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