Utility sector policies are those policies that directly affect the way that the state's electricity and natural gas utilities do business and serve the energy needs of their customers. These policies include utility forecasting and planning requirements for energy efficiency, requirements for energy efficiency delivery to customers, regulatory mechanisms to determine utility revenues for energy efficiency services, processes for working collaboratively with other utilities and energy stakeholders to advance energy efficiency, requirements for evaluating energy efficiency programs and portfolios, and policies to promote the development of the next generation of energy grids.
Resource planning for electric utilities is addressed in 4 CSR 240-22. Plans are filed every 3 years, with a 20-year forecasting horizon. 4 CSR 240-22.050 requires that demand-side resources are evaluated with a goal of achieving all cost-effective demand-side savings.
4 CSR 240-40.018 sets forth a policy statement that natural gas distribution utilities should engage in resource planning efforts to help mitigate price volatility and ensure adequacy of supply.
► Overview of Resource Planning policies in the Midwest
Energy Efficiency Standards
The Missouri Energy Efficiency Investment Act (2009 SB 376; Missouri Revised Statutes 393.1075) authorizes the Missouri PSC to approve demand-side management programs (Demand Side Investment Mechanisms, DSIMs) for the state's utilities, and to allow cost-recovery, lost revenue recovery, and incentive mechanisms to make the utility whole for the operation of those programs. MEEIA does not set forth any targets for energy efficiency and program filings under MEEIA are entirely voluntary by the utility.
PSC Rules for MEEIA implementation do lay out a guideline for reviewing progress toward achieving "all cost-effective demand-side savings" in 4 CSR 240-20.094(2)(A) that ramps up to a level of 1.9% of electricity by 2020, but this is a non-binding guideline.
Rules for establishing a DSIM under MEEIA are located at 4 CSR 240-20.093 and rules for energy efficiency programs in the DSIM are found at 4 CSR 240-20.094. Filing and submission requirements for the DSIM and energy efficiency programs are found in 4 CSR 240-3.163 and 4 CSR 240-3.164, respectively.
Missouri does not have a statewide standard, mandatory or voluntary, for natural gas energy efficiency.
► Overview of Efficiency Standards policies in the Midwest
Rate Structures & Incentives
MEEIA provides for timely cost recovery of all reasonable and prudent costs associated with the delivery of cost-effective demand side programs (RSMo 393.1075.3(1)).
Lost Revenue Recovery
In addition to allowing for cost recovery, MEEIA also allows for "timely earning opportunities" associated with verified energy efficiency savings (RSMo 393.1075.3(5)). Lost revenue recovery is retroactive and must be based on measured and verified savings (4 CSR 240-20.093(2)(G)5).
MEEIA allows for utilties to propose incentive mechanism for demand-side program performance as part of their DSIM. Incentives are through a shared net benefits approach and must be documented through measurement and verification of savings (4 CSR 240-20.093(2)(H)).
There are no penalties in Missouri for utilities that do not meet their voluntary MEEIA plans. Penalties are specifically not authorized according to PSC rules in 4 CSR 240-20.093(2)(E).
► Overview of rate structures & incentives in the Midwest
Stakeholder participation in Missouri consists primarily of intervention in Public Service Commission proceedings. The now-inactive Missouri Energy Stakeholder Process was brought together by the Division of Energy at MoDNR and included utilities, the state energy office, environmental groups, utility groups, renewable energy and energy efficiency advocates and others to provide input on maintaining competitive energy costs for Missourians, growing a clean energy economy, and achieving energy security through cost-effective energy savings.
The formation of utility-specific stakeholder groups to provide advisory input on the implementation of MEEIA programs has been ordered by the Commission in its rules for demand-side programs at 4 CSR 240.20-094(8)(A) and the creation of a statewide utility stakeholder advisory collaborative open to the public at 4 CSR 240.20-094(8)(B).
► Overview of stakeholder collaboratives in the Midwest
RSMo 393.1075.4 requires that the Total Resource Cost Test (TRC) be the preferred cost-effectiveness test for energy efficiency programs in Missouri. Programs, with the exception of low-income and general education programs, must meet the TRC to be considered cost-effective and eligible for cost recovery. Other tests may also be used by utilties in their program screening or justification of their programs in their DSIM filings but the TRC is the minimum requirement.
According to the filing and submission requirements for a utility DSIM in Missouri (4 CSR 240-3.163(7)(B)2.B) failure to meet cost-effectiveness testing is not sufficient in itself to disallow cost recovery for the program.
Net vs. Gross
Utilities in Missouri are required (4 CSR 240-3.163(7)(B)1) to report both Gross and Net energy savings as part of their evaluation reports. Demand side program filings are required to describe strategies to minimize free-riders and to maximize spillover (4 CSR 240-3.164(C)15-16).
Technical Resource Manual
The state of Missouri does not have a technical resource manual for energy efficiency programs. Utilities can propose their own deemed savings or individual TRMs in their MEEIA filings. Commission rules pertaining to the creation of a statewide utility stakeholder advisory collaborative at 4 CSR 240.20-094(8)(B) specify that the stakeholder collaborative address the creation of a statewide TRM.
► Overview of efficiency program evaluation in the Midwest
The Smart Grid Information Clearninghouse identifies the following smart grid projects in Missouri:
Recovery Act-funded smart grid projects that benefit Missouri, as identified on SmartGrid.gov include:
► Overview of smart grids in the Midwest