JEFFERSON CITY, Mo. – Constituent coalitions, including the Consumer Energy Alliance (CEA), Lake of the Ozarks Regional Economic Development Council (LOREDC), and Missourians for a Balanced Energy Future (MBEF) are pleading with the Legislature not to kick the utility grid modernization down the road, hoping to see Sen. Ed Emery’s SB 190, the Economic Development and Infrastructure Act, passed by the General Assembly. Meanwhile, other coalitions, including the Consumers Council of Missouri, are protesting.
Advocates claim that not passing the bill would hold the state back from Ameren’s investment proposal, which they believe will provide a 2-to-1 benefit-cost ratio for customers. The estimate is consistent with states who have passed similar legislation. Those states also showed decreased maintenance costs, whereas states without a modern grid are seeing an increase in maintenance costs and unreliability, which hurts businesses across the respective state.
The nonpartisan and nonprofit MBEF explained that the current utility infrastructure in the state was built over 50 years ago, limiting stability, efficiency, and security. Missouri is one of four states who has not passed legislation to enable grid modernization.
Seeking to upgrade aging grid infrastructure, St. Louis-based Ameren Missouri said passage of a bill now under consideration in the Missouri Senate is critical to providing electric customers with new choices and greater convenience while ensuring Missouri remains competitive with other states.
“Did you know Missouri’s electric utility laws are nearly 100 years old?” CEA’s advocacy site asks. “Our state’s aging electric infrastructure is also 50 to 60 years old and dated regulations won’t allow it to be upgraded for another 40 years! Even worse, Missouri’s ability to restore power after a storm is among the worst in the nation.”
The coalitions are all promoting a constituent contact campaign, encouraging Missourians to contact their legislators to voice their support for the bill. One letter from the CEA reads:
Much of Missouri’s electric infrastructure is more than 50 years old. While we are among the nation’s leaders in reliability – when we do get power outages they generally occur because of winter storms or tornados – our state is near the bottom in time taken to restore service. We must improve our ability to restore service while maintaining our excellent reliability record.
Fortunately, the Economic Development and Infrastructure Investment Act offers solutions by helping to update our nearly 100-year-old utility regulatory structure with a forward-looking plan that would generate up to $1 billion in private investment in electric infrastructure, while enhancing consumer protection and oversight.
These upgrades for Missouri families would include new electric infrastructure and the inclusion of more smart-grid technologies to prevent power outages, grid security threats and restore power more quickly. The proposed legislation would also create thousands of new jobs for families all across the state while adding incentives for Missouri’s renewable energy.
It is estimated that the legislation would trigger the creation of over 3,000 well-paying jobs.
LOREDC has gone as far as contacting their local newspaper to mobilize constituents.
“Imagine if Missouri’s energy utilities could take a similar path,” Tim Jacobsen, LORECD president wrote in a recent letter to the editor. “What if aging, failing substations that use decades-old equipment were replaced with the most modern, technologically advanced equipment? Think about what could happen if equipment not prone to failure were deployed everywhere, providing electricity even more reliably and affordably than it is today. Stable and affordable energy is a priority for today’s consumers and businesses.
“The General Assembly is considering legislation to update the Missouri’s energy plan and make it easier for our utility companies to deploy more advanced equipment into their substations.
“The Lake of the Ozarks Regional Economic Development Council (LOREDC) feels the legislation, SB 190/HB 628, must be passed now to ensure we have a more efficient and dependable energy grid in Missouri.”
MBEF lauds the legislation is necessary if Missouri is not to fall behind, but also to give a boost to the state’s stagnant economy.
“To guarantee a safer and more modern grid, SB190 will lead to thousands of good paying jobs for working men and women,” MBEF touts. “The installation of smart meters, storm-resistant polls and wires and upgrades to transmission stations require thousands of hours of labor for Missouri’s utility workers.”
The legislation would support Ameren Missouri’s proposal for a $1 billion, five-year grid modernization plan, which would include investments in smart meters, substation replacement, storm hardening and distribution automation to improve reliability. There is also now an amendment on the table that would create a provision for Doe Run and to encourage the re-opening of a Noranda smelter in southeast Missouri. The Doe Run provision would also the facility to expand by providing advanced technology to make the state the primary lead producer in the country again.
A smart grid uses digital technology to improve reliability and efficiency of delivering electricity to customers. Modern grid technology can help shorten any power outages and can provide better protection from cyber attacks.
“Like a lot of parts of the country, we are looking at how we go about replacing obsolete equipment and accelerating the pace of smart grid deployment,” Warren Wood, Ameren Missouri vice president of external affairs and communications, told the Daily Energy Insider.
Wood says all but about four states in the country have implemented policies to either remove disincentives or to encourage investment levels in smart grid technologies.
“We’re trying to find a way to ramp up those investment levels in Missouri to deploy this technology faster and give the benefit to customers faster, to say nothing of the economic development and jobs that come with making those sorts of investments in the region and providing a lot of new orders and work to local businesses,” Wood continued.
Vocal opposition to the bill has come from the Consumers Council of Missouri (CCM) and the Missouri Coalition for the Environment (MCE). Both bills believe that the bill “erode consumer protections” or “hurt the environment.”
CCM is led by Cara Spencer, executive director and also Democratic St. Louis alderwoman. Spencer last week emailed members asking them to contact Sens. Gary Romine, Doug Libla, and Jill Schupp and thank them for their opposition. CCM believes the legislation would increase utility bill costs.
“Sen. Gary Romine, Sen. Doug Libla, and Sen. Jill Schupp represent a few brave voices speaking up against a torrent of utility propaganda,” says John Coffman, utility counsel for Consumers Council of Missouri.
Both CCM and MCE protested against the monopolies utility companies hold in Missouri. The PSC oversees the regulated monopolies, which utilities like Ameren say are holding economic investment and modernization back.
CCM has been quick to protest that the bill does not fix any current problems.
“What has does that mean for Missouri?” Spencer asked. “On average, Missouri electric rates are currently among the lowest in the Midwest. This is an incredible benefit for our state economy. But this could be wiped away entirely by legislation currently pending in the State Legislature.”
“So what needs to be fixed: profits?” she continued. “The biggest monopolies here in Missouri – Ameren Missouri, KCPL, Laclede Gas (Spire), and Missouri-American Water Company—have been making very generous profits, enjoying increasing dividends, as well as soaring stocks prices.”
“Reliability? Both Ameren Missouri and KCPL currently have the some of the highest electric reliability data in the Midwest. Low rates, high reliability, and profitable utilities. What is wrong with this picture that needs to be ‘fixed’?”
THE AMEREN PLAN
Ameren serves 1.2 million Missourians – just under a sixth of Missouri’s population. The Fortune 500 utility company plans to invest $1 billion over 5 years to update their grid.
The company said its grid modernization plan would provide a $2.40 benefit to customers per $1 invested, consistent with a number of grid modernization plans in other states.
“When you look at the state of Missouri and look at investment levels for its electric grid, we are about in the bottom quartile in the country. Fortunately, our reliability is in the top quartile of the country,” Wood said.
Ameren also fears that without investment, the reliability will decrease. The modernization would also be able to provide customers with more information about their energy consumption by including usage levels on bills.
Their plan also includes retiring one-third of coal-fired plants and expanding more renewable sources, such as solar and wind power. All coal plants would be retired by 2033. Ameren’s solar plant in O’Fallon opened two years ago, in December 2014.
“We’re already well below the state average for percentage of energy from coal-fired generating stations,” Wood told the Daily Energy Insider.
Ameren’s plan calls for significantly expanding renewable generation by adding 400 megawatts (MW) of wind power, 45 MW of solar, 28 MW of hydroelectric and 5 MW of landfill gas.
The bill includes a provision that would allow Ameren to expand their testing of burning processed solid biomass to also reduce their carbon emissions.
Ameren filed a rate case with the Missouri Public Service commission in July 2016 to get permission to increase their annual revenue. Ameren hopes the PSC will also consider the $1.4 billion in clean energy projects since the last rate case, also two years ago. The rate case is expected to be decided in May.
Ameren itself is encouraging Missourians to contact legislators via their Power Forward Missouri program, an initiative which promotes the bill and the benefits.
“The electric grid is the backbone of our economy,” the Power Forward Missouri site states. “By making minor, thoughtful adjustments to our energy regulations, Missouri can develop a more forward-thinking energy policy that will allow us to create up to 3,300 jobs building the next generation of smart grid infrastructure.”
“Modern utility regulations in Missouri will enable investor-owned energy companies to meet the growing expectations of electric service customers. A modern regulatory framework will support greater investment in smarter technologies, reduce the time it takes to restore power after outages, better protect our electric grid from physical and cyber attacks, and keep rates more stable and predictable.
“Ameren Missouri has identified more than $1 billion in investments to build customers a smarter, stronger grid. These are investments we could accelerate if Missouri modernizes its century-old regulatory process. New potential investments would give a boost to economic development in Missouri, creating more than 3,300 direct and indirect jobs and benefits for customers.”