In 2009, the Missouri General Assembly passed Senate Bill 376 - the Missouri Energy Efficiency Investment Act ("MEEIA"). This bill changed the entire paradigm for electric utilities in Missouri. Prior to this legislation, utilities built generating units and recovered the costs of these units and other expenses in rates. Since profit margin was largely collected through a usage charge, the electric utility actually had a motivation to sell more electricity. Given this, the utilities actually had a disincentive to promote energy efficiency and conservation. Therefore, the General Assembly passed SB376 which allowed electric utilities to collect its costs of promoting energy efficiency. In addition, MEEIA allows the utility to share in the savings generated through energy efficiency.
►Large Customer Opt Out:
The General Assembly recognized, however, that many large commercial and industrial customers had and were already spending their own capital to implement energy efficiency measures in their factories and offices. These steps included high efficiency lighting, motors, pumps and HVAC. Since these customers had already taken the steps on their own, it was deemed to be unfair to ask those customers to pay for the utility to take the same identical steps. Therefore, Section 393.1075(7) of the bill allows certain large commercial and industrial customers to opt-out of paying any of the electric utility’s energy efficiency costs.
Section 393.1075(7) provides the ability to opt-out of these costs for 3 types of customers: (1) The customer has one or more accounts within the service territory of the electrical corporation that has a demand of five thousand kilowatts or more; (2) The customer operates an interstate pipeline pumping station, regardless of size; or (3) The customer has accounts within the service territory of the electrical corporation that have, in aggregate, a demand of two thousand five hundred kilowatts or more, and the customer has a comprehensive demand-side or energy efficiency program and can demonstrate an achievement of savings at least equal to those expected from utility-provided programs.
►Savings Associated with Opt Out:
The savings associated with energy efficiency opt out are significant. Ameren's current energy efficiency charge for a Large General Service customer is 0.2496 cents / kWh. KCPL's energy efficiency charge is 0.332 cents / kWh. GMO's energy efficiency charge is 0.315 cents / kWh. Finally, while Empire District Electric never implemented a MEEIA energy efficiency program, it does have a minimal program. The opt out amount for Empire opt out customers is 0.071 cents / kWh.
Therefore, a KCPL industrial customer that uses 50,000,000 kWh annually will save $166,000 annually as a result of a decision to opt out of these costs. ALL of the MECG members that are eligible to opt out have decided that it is better to opt out of these costs and fund any future energy efficiency measures from the opt out savings.
►Opt Out Procedure:
The window to opt out of a utility's energy efficiency costs opens on September 1 and closes on October 30 of each year. Depending on the applicable opt out criteria may be very simple or may involve providing some supporting information to the Public Service Commission Staff. Please contact MECG if you would like to discuss energy efficiency opt out.
Copyright © 2017 Midwest Energy Consumers Group - All Rights Reserved.