RECENT POSTSGov. Nixon signs legislation encouraging energy efficiency to save utility customers money
KANSAS CITY, Mo. - Gov. Jay Nixon today signed into law Senate Bill 376, which will encourage energy efficiency, create jobs, and help grow the new energy economy. Known as the Energy Efficient Investment Act, the bill is aimed at meeting increased demand for electric power while protecting the environment and holding costs down for consumers.
Senate Bill 376 sets a goal for Missouri's investor-owned electric utilities to achieve all cost-effective savings possible from energy efficiency programs. It provides the Public Service Commission with the ability to encourage cost-effective energy efficiency by making utility investments in energy efficiency programs for their customers at least as profitable as building new power plants or making capital investments. Energy efficiency programs, which require Commission approval, must be cost-effective or in the public interest, result in energy savings and be beneficial to customers in the customer class in which it is proposed. The bill allows the Commission to develop cost recovery mechanisms for approved programs.
"Energy efficiency saves customers money, creates jobs and is good for our economy," Gov. Nixon said. "Missourians spend approximately $20 billion each year on all of our energy needs and import nearly 95 percent of the primary energy sources we use. By becoming more energy efficient and reducing our expenditures on energy, we keep more of these energy dollars in Missouri's economy and in Missourians' pockets."
Gov. Nixon signed the legislation during a public ceremony following tours of two major energy efficiency projects at customers of KCP&L, an investor-owned electric utility headquartered in Kansas City. As a result of this legislation, KCP&L will have the opportunity to integrate additional energy-efficiency programs into its operations and save consumers millions of dollars each year. Gov. Nixon toured Altec Industries Inc. in St. Joseph, which is working with KCP&L to replace old 400W high-pressure sodium light fixtures with more efficient T5HO fixtures. Once all these replacements are completed, the companies estimate a savings of more than 800,000 kwH of electricity.
"Missouri currently stands at the crossroads of how to best meet our energy needs," said state Sen. Brad Lager of Maryville, the sponsor of Senate Bill 376. "In order to help keep energy costs from continuing to rise dramatically, it is critical that we must become more efficient and effective with our current consumption.
With the passage of this bill and the adoption of energy efficient practices, Missourians can dramatically reduce their energy consumption and benefit immediately from the savings. Now, energy companies can partner with their customers to better utilize the energy they currently consume.
"Energy Efficiency programs are the cleanest, easiest and quickest ways to protect our precious resources and energy efficiency programs are a vital component of any successful comprehensive energy policy," Sen. Lager said. "Senate Bill 376 finally adds this tool to the toolbox."
Gov. Nixon also toured the new Chilled Water Plant at the University of Missouri-Kansas City. In 2007, UMKC began working with Burns & McDonnell, a Kansas City-based engineering and design firm, to develop and build energy-saving features for existing and future buildings, such as efficient lighting, better exhaust and lab controls, plumbing that conserves water, and night set-backs for heating and cooling systems. By participating in a rebate program with KCP&L, and because of reductions in energy consumption, these upgrades are paying for themselves; the projects also have resulted in the elimination of more than 11,000 tons of carbon dioxide.
"On behalf of the more than 100 members of the statewide coalition that sponsored and supported Senate Bill 376, I would like to thank Governor Nixon for his leadership in signing this important piece of legislation into law," said Bill Downey, President of KCP&L. "With this legislation, KCP&L has more tools to meet the challenge of managing our region's increasing demand for electricity, keeping costs for that power among the lowest in the nation and protecting our environment now and for future generations."
As demand for electricity has continued to increase in recent years, investor-owned utilities traditionally have had two options for meeting those needs: increasing efficiency to reduce demand, or building new power plants to increase supply. Prior to Senate Bill 376, the costs associated with building new plants could be recovered while costs related to efficiency could not, making increases in efficiency a difficult business option. But with Senate Bill 376 in effect, utilities will now be able to include the costs of qualifying efficiency programs in the package of costs which they may recover, treating energy efficiency as a generation source. Because the cost to implement energy efficiency programs is much less expensive than the capital costs related to building new plants, utility customers will save money.
"This legislation will allow us to expand our energy efficiency efforts and invest more money locally in our customers," said Michael Chesser, Chairman and CEO of KCP&L. "By investing money in our region with companies and institutions that are our partners in efficiency programs, we are investing in Missouri, creating jobs and helping Missouri companies become more competitive. It is a winning combination for our region, for our customers and for our company."
Beyond the efficiency incentives for consumers and producers of energy that are provided in Senate Bill 376, the legislation also has positive environmental impacts. The legislation's focus on efficiency and conservation led to its support by many individuals and organizations seeking to make Missouri's energy infrastructure more "green."
"Encouraging investment in energy efficiency is one of those rare public policy initiatives where everyone wins," said Rebecca Stanfield, senior energy advocate with the Natural Resources Defense Council. "Consumers win with less expensive energy, utilities are able to invest in a solid business proposition, and communities win as we move towards a cleaner environment and more sustainable economy. We applaud Governor Nixon for signing this legislation into law."
In addition to support from utilities, environmental groups and consumer advocates, Senate Bill 376 also received bipartisan support in the legislature. The Energy Efficiency Investment Act will take effect on August 28, 2009.
Source: http://governor.mo.gov/newsroom/2009/Energy_Efficient_Investment_Act