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State Energy Efficiency Policy Database

Missouri

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Summary

Missouri is began a major transformation in the scope and role of utility-sector energy efficiency programs in 2009 when the state enacted SB 376, the Missouri Energy Efficiency Investment Act (MEEIA). Among its many provisions, it requires Missouri’s investor-owned electric utilities to capture all cost-effective energy efficiency opportunities. After some delays in the implementation of MEEIA, one of the state’s largest utilities launched a full suite of customer programs beginning in 2012 and the state’s other largest utility will be filing a 3-year program plan as required by MEEIA in 2013.

Prior to the developments of the past few years, Missouri has historically had limited energy efficiency programs for utility customers. While fundamental rules have been in place since the early 1990s for integrated resource planning (IRP) and demand-side management (DSM), such rules had not yielded significant levels of utility spending on DSM programs. MEEIA and related commission orders have led to a rapid and large increase in utility energy efficiency programs, with a full roll-out of program plans from all affected utilities still pending.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables on the left.

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November 8, 2013


Customer Energy Efficiency Programs

Passage of the Missouri Energy Efficiency Investment Act in 2009 marked the beginning of a new era for customer energy efficiency programs in Missouri. Program development and implementation has been somewhat slow as rules, rate structures and program plans needed to be established. The overall level of funding and associated program activity had been relatively modest. A major barrier had been working out specific rate structures that would address utility financial concerns (see ER-2010-0355 and ER-2010-0356). In 2012 the Commission reached an agreement with Ameren Missouri (the state’s largest regulated utility) and stakeholders to enact a rate structure supportive of customer energy efficiency programs. The result was a 3-year program plan for the utility with a total budget of $145 million. The state’s other utilities affected by MEEIA have not yet submitted and received approval for their program plans in accordance with provisions of the act. However, the utilities affected by MEEIA do have existing programs in place. 

Provisions of MEEIA allow customers to opt-out of all cost-recovery mechanism (CRM) fees if they have a demand of at least 5,000 kW in the previous twelve months, if they are an interstate pumping station of any size, or if they show they a "comprehensive" demand or energy efficiency program in place that is saving an amount at least equal to utility-provided programs and have a demand of at least 2,500 kW. Customers opting out under the 2,500 kW/comprehensive demand-side management plan category must submit their plan to the Missouri Public Service Commission for review.  Customers wishing to opt out under either of the other categories simply provide notification to their utilities that they wish to opt out.  There is currently no follow-up or ongoing monitoring of the efficiency investments made by any opt-out customers due to a dispute among interested parties regarding statutory authority. 

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables on the left.

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November 8, 2013


Energy Efficiency Resource Standards

Missouri has voluntary energy savings targets in place. SB 376 set out voluntary goals for electric utilities to achieve 0.3% annual savings in 2012, ramping up annually to 0.9% in 2015 and 1.7% in 2019 for cumulative annual savings of 9.9% by 2020. The standard also includes peak demand reduction goals. 


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August 9, 2013


Alternative Business Models

In 2011 the Missouri Public Service Commission promulgated rules that authorize utilities to file for recovery of lost revenues (See 4 CSR 240-3.163, 4 CSR 240-3.164, 4 CSR 240-20.093, and 4 CSR 240-20.094). In 2012 the Commission approved a demand-side investment mechanism which allows Ameren Missouri to collect $80 million in an annual revenue requirement (Case No. ER-2012-0166) for recovery of demand-side programs’ costs, recovery of fixed operating costs and a future performance incentive award based on after-the-fact verified energy savings from the programs (See Case No. EO-2012-0142). KCP&L Greater Missouri Operations Company (GMO) has an investment mechanism that allows collection of an $18 million annual revenue requirement for recovery of demand-side programs’ costs, recovery of fixed operating costs and a future performance incentive award based on verified energy savings.

Missouri Gas Energy has straight-fixed variable (SFV) rate design.  Laclede Gas and Ameren Missouri Gas both have a weather-mitigated rate design that is similar to SFV in principle.


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August 9, 2013


Reward Structures for Successful Energy Efficiency Programs

The rule implementing SB 376 provides for more timely cost recovery of DSM program costs by allowing adjustments to the funds collected between rate cases. Currently costs are recovered over a 6 or 10 year period. The SB 376 rule allows a regulated electric utility to propose performance incentives that are based on net shared benefits from the DSM programs it implements. Any utility incentive component of a DSIM shall be based on the performance of demand side programs approved by the commission in accordance with 4 CSR 240-20.094 Demand- Side Programs and shall include a methodology for determining the utility’s portion of annual net shared benefits achieved and documented through EM&V reports for approved demand-side programs. Each utility incentive component of a DSIM shall define the relationship between the utility’s portion of annual net shared benefits achieved and documented through EM&V reports, annual energy savings achieved and documented through EM&V reports as a percentage of annual energy savings targets, and annual demand savings achieved and documented through EM&V reports as a percentage of annual demand savings targets. Utilities may also propose recovery of lost revenues as measured and verified through EM&V prior to recovery on a restrospective basis.


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August 9, 2013


Energy Efficiency as a Resource

The Missouri Energy Efficiency Investment Act of 2009 (MEEIA) established a new standard in the state for electric utility investment in demand side management: The Act directs the Missouri Public Service Commission to permit electric corporations to implement commission-approved demand-side programs proposed pursuant to this section with a goal of achieving all cost-effective demand-side savings. The Missouri PSC also completed a revision of its IRP rules in Case No. EX-2010-0254 and requires demand side and supply side measures to be evaluated on an equivalent basis.

For further reading, in August 2011, as part of the State Clean Energy Resource Project, ACEEE completed the report Missouri's Energy Efficiency Potential: Opportunities for Economic Growth and Energy Sustainability.


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August 12, 2013


Evaluation, Measurement & Verification
  • Cost-effectiveness test(s) used: TRC, PCT, SCT, RIM for electric utilities.
  • Uses a deemed savings database: yes. (A technical resource manual (TRM) was approved for Ameren Missouri as part of the stipulation and agreement in Case No. EO-2012-0142.  A statewide collaborative of electric investor-owned utilities and their stakeholders is expected to begin investigation in 2013 of a statewide TRM.)

The evaluation, measurement and verification of ratepayer-funded energy efficiency programs in Missouri relies on 4 CSR 240-22.070(8), 4 CSR 240-3.163(7) and 4 CSR 240-20.093. Evaluations are performed by the utilities’ independent evaluators and are reviewed by the Missouri Public Service Commission’s EM&V auditor.  Missouri uses four of the five classic benefit-cost tests identified in the California Standard Practice Manual. These are the Total Resource Cost (TRC), Participant (PCT), Social Cost (SCT), and Ratepayer Impact Measure (RIM). Missouri specifies the TRC to be a primary test for cost effectiveness. The benefit-cost tests are required for portfolio and total program level screening.  Some exceptions exist for low-income programs, pilots, and new technologies.

Natural gas utilities use all five cost effectiveness tests as governed by. 4 CSR 240-14 and 4 CSR 240-3.255.


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August 13, 2013