This article first appeared in the St. Louis Beacon: October 16, 2008 - If you're searching for a bright spot amid the recent series of economic shocks -- nest eggs cracked, jobs lost, budgets busted, energy costs at painful levels -- proponents of Proposition C on the Nov. 4 ballot think they have an answer.
"We're in a pretty significant economic crisis in the state and nationally, and one of the reasons for our economic troubles is the high cost of energy and our dependence on fossil fuels and foreign oil," Tony Wyche, the spokesman for Missourians for Cleaner Cheaper Energy, which supports Prop C as a step toward energy independence.
Prop C, also called the clean-energy initiative, would require investor-owned utilities in Missouri, including AmerenUE, to generate or purchase electricity from renewable energy sources -- including wind, solar, biomass and hydropower -- in incremental steps between 2011 and 2021. Rate increases for customers would be capped at 1 percent.
The three utilities affected are taking different approaches to the proposal. Kansas City Power & Light CP&L is favoring it, while the Empire District Electric Co., which serves the southwest part of the state, is neutral. AmerenUE, while officially neutral, is raising lots of questions. But it isn't campaigning against the plan.
To Wyche, the attitudes of the utilities is telling: This is not an issue to go against the popular sentiment.
"People feel it's doable and it's necessary," he said. "There is a lot of public support for people to have their say in where they will be getting their energy from.
"If we are able to make ourselves more energy independent, we will also be able to create good jobs in clean technology areas like wind turbine construction and solar panels. They're all intertwined. If we can get clean energy, we can help create jobs and protect our environment."
But Warren Wood, a spokesman for the utilities, wants to temper such enthusiasm. He cautions that a government requirement for renewable energy isn't necessarily the best approach to take.
"There's some concern that if we do a mandate like this, we will potentially invest in renewable resources earlier than is cost-effective and will be helping fund renewables that may not be built in this region," said Wood, who is executive director of the Missouri Energy Development Association.
He also says that cost-saving statistics being highlighted by those in favor of the proposition are misleading. The savings are likely to occur whether it passes or not.
"Will there be these huge savings in the future because of this petition?" Wood asked. "No, because we're already doing these savings."
DETAILS OF THE PROPOSAL
Proposition C made it to the ballot after volunteers collected signatures on an initiative petition. The secretary of state's office originally ruled that the petition drive had fallen short, but a Cole County judge said otherwise and placed it on the ballot.
So far, 26 states have in effect mandates similar to what are included in Proposition C, with details differing as far as percentages and timetables.
In Missouri, approval of the proposition, which needs a simple majority for passage, would require the investor-owned utilities to generate or buy electricity from renewable energy sources such as solar, wind, biomass (including ethanol) and hydropower. Nuclear energy is not included.
The timetable is this:
- 2 percent by 2011
- 5 percent by 2014
- 10 percent by 2018
- 15 percent by 2021
Of the total renewable energy sources, at least 2 percent would have to be solar.
Any utility rate increases that result from the proposal would be limited to 1 percent.
Even if the targets are met, Missouri will continue to rely heavily on coal for power. Now, about 82 percent of the power produced by Missouri utility companies is derived from coal, far more than the national average of 49 percent, and renewable sources, excluding hydroelectric power, play no significant role in the power mix.
A cost analysis sponsored by the Missouri Coalition for the Environment and conducted by Martin Cohen, a longtime leader of the Illinois Citizens Utility Board, found that over a 20-year period beginning in 2011, the proposal would lead to a net savings of $331 million for customers of the utilities affected.
For individual households, the study found average customers would pay an additional 36 cents a month over the first 10 years that the mandate is in effect; during the next 10 years, the household would save an average of 86 cents a month, and by 2030, the savings would be $1.65 a month.
But proponents have talked about more than rates. They also have talked about a broader economic impact, in terms of jobs, income and the value of new goods and services that would be produced because of the mandates for renewable energy sources.
Another study, conducted by David Laslo at the Public Policy Research Center at the University of Missouri at St. Louis, found that Proposition C has the potential to create nearly 14,000 jobs in manufacturing, construction, operation and maintenance, with as much as $1.16 billion in new income and benefits.
For every new job added in energy-related industries, the study estimated an additional 1.14 new jobs in supplier, retail and service industries.
So the overall benefits of the proposition would be widespread and positive, said Erin Noble, energy policy coordinator for the Missouri Coalition for the Environment.
"We have seen incredible economic, public health and environmental impacts in the 26 states where this has been done," she said. "If we don't follow suit now, we would miss the chance to develop the renewable energy industry in our state."
AMEREN: NOT THE BEST PLAN
Though AmerenUE is not actively opposing Proposition C, it has definite concerns over its mandates and the effect it will have on its customers.
The utility says no one can tell what the full costs of complying with the prescribed percentages will be, particularly the provision that requires at least 2 percent of renewable energy to come from solar energy. That mandate restricts utilities from choosing whatever renewable source is the most reliable and cost-effective, Ameren says.
It also notes that Missouri may not have enough cost-effective solar and wind power resources to meet the mandates, so utilities might have to buy energy credits from elsewhere, meaning dollars would flow out of the state.
Further, Ameren says it already is complying with the Green Power Initiative, a voluntary plan for renewable energy signed into law last year that sets lower targets, growing to 11 percent by 2020.
But Noble of the Coalition for the Environment says voluntary standards have no enforcement mechanism and are not as effective as the mandates in Proposition C.
Links to resources:
Click here for the campaign website.
Click here for the consumer cost analysis.