From the Blog

Are Missouri’s Renewable Energy Standards Outdated?

20

JULY, 2017

In 2007, the iPhone was introduced to the world, the Dow Jones Industrial Average was 12,000, and the hit TV show of the year was The Sopranos.

Here we are, ten years later, and we are on the 10th generation of the iPhone, the Dow Jones Industrial Average is 20,409, and Tony Soprano is dead.

A lot has changed in ten years. However, one thing that has not changed is Missouri’s Renewable Energy Standard (RES). In 2007 the language that would eventually end up on the ballot as Proposition C in 2008 was drafted. Proposition C, which created Missouri’s Renewable Energy Standard, was passed by the voters of Missouri in 2008, garnering 66% of the vote. It received a higher percentage of support than any other RES in US history, and it outlined specific percentage goals for Missouri to reach in renewable energy production from 2011 to 2021.

Fast forward a decade:

  • The cost of photovoltaic panels has dropped around 90% since Missouri’s RES was adopted by the voters.
  • The cost of wind energy (price per kilowatt-hour) has fallen over 50% since Missouri’s RES was approved by the electorate.
  • Missouri’s Renewable Energy Standard has not changed in a decade.
The National Renewable Energy Laboratory’s solar energy research facility.

Ask yourself this question: If you worked at the same company for ten years, and you trimmed costs for that company by 90%, but you never received a raise since 2008, how would you feel?

If the costs of renewable energy have dropped so significantly over the past decade, why have the renewable energy production targets for Missouri not been increased?

One-half of Missouri’s investor owned regulated utilities have already surpassed the renewable energy standards for 2021, but others are not even close to hitting those minimum requirements. Why aren’t all utilities blowing these dated requirements/standards out of the water when the cost to produce that energy has dropped 50-90%? One answer is because of cost mitigation measures in the RES.

“Utilities may be excused from their [RES] obligation for events beyond their control or if the cost of compliance with the standard increases retail electricity rates by more than 1% in any year.”

Missouri ranks as having the 2nd most restrictive investment cost cap measures in the US, falling 4 ½ times below the national average. If the investment cost cap included in the RES language were due to the higher cost of renewable energy in 2007/2008,  and those costs have dramatically dropped, isn’t it time we adjust the investment cost cap to reflect those massive cost reductions?

Here is another important question: Are Missouri’s RES standards thwarting job growth in our state?

According to a January 2017 article in Fortune Magazine the solar and wind industries are each creating jobs at a rate 12 times faster than the rest of the U.S. economy. Additionally solar and wind jobs have grown at rates of about 20% annually in recent years. If Missouri has the 2nd most restrictive investment cost cap on renewable energy, are we sending all that job growth to other states?

I believe it is time for Missouri (and all US States) to take a long hard look at their renewable energy standards.   It is my hope that they would be updated to reflect the changes in the cost structure and the market for renewables, to ensure that our noble goals are not so outdated that they become an obstacle to creating jobs and growing our economy.

 

Comm. Scott Rupp has been on the Missouri Public Service Commission since 2014. He runs an informational and entertaining website www.SimplifyingEnergy.com where you can find his weekly blogs and podcasts related to the energy industry. You can follow him on Twitter @Scott_Rupp.

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