Missouri utility’s efficiency plan to target renters, low-income customers

Six weeks after its efficiency program lapsed, Missouri’s largest electric utility today got regulatory approval today of a new, three-year replacement. It is likely to take effect sometime this spring.

On Friday, a group of interested parties including clean-energy advocates, the state’s Office of Public Counsel and a St. Louis community-development organization signed a stipulation endorsing the new $158 million plan.

Andrew Linhares, staff attorney for Renew Missouri, called the new program “a step forward for energy efficiency, a growing industry in Missouri with more jobs than the coal and natural gas industries combined. Plus, it happens to be the cheapest way for a utility to meet its customers’ electric needs.”

The efficiency plan, first instituted in early 2013, provides discounts on a variety of upgrades such as heating and cooling systems, light bulbs and insulation.

In October, the Missouri Public Service Commission rejected Ameren’s proposed efficiency plan, which would have taken effect on Jan. 1, 2016 and continued through the end of 2018.

The commission concluded that, as proposed, the plan would have benefited only that small proportion of customers who take advantage of the discounted efficiency improvements. Non-participating customers could benefit if, for example, reductions in demand for electricity were such that they negated the need to invest in a new power plant.

In their October ruling, the commissioners also said Ameren was overcompensated during the first three years of its efficiency program, and was almost certain to be overcompensated in the next three years. State law allows utilities to recoup revenues that are lost due to reduced sales resulting from greater efficiency. However, the commission said that Ameren didn’t have a reliable way of measuring how much energy was saved as a consequence of the efficiency program.

After months of meeting with stakeholders, Ameren agreed to change the way it calculates how much revenue it is losing due to customers operating more efficiently.

Ameren will hire coordinators to work with people with low incomes, who tend to pay a higher proportion of their income to utility bills, and typically do not take advantage of discounted high-efficiency appliances, light bulbs and the like.

The program will also target renters, who “have traditionally been left out of utility-sponsored energy-efficiency programs,” said Renew Missouri spokesman Mark Walter.

“That’s because of what we call a split incentive. If you’re a renter, you don’t benefit from investing in efficiency. If you’re a property owner, there’s no incentive because you may not be paying the utility bills.”

The Cycle 2 benefits are structured in a way that “makes it much easier for owners and tenants to both benefit from a single program,” said Ashok Gupta, director of programs for the Natural Resources Defense Council “This is integrated. It combines everything.”

The revised program also ensures that modifications can be made to the efficiency program for the years 2017 and 2018. Ameren commits in the new agreement to discuss with clean-energy advocates and other interested parties possibly adding new efficiency strategies and increasing the energy savings goal, possibly by 300 to 400 gigawatt hours.

“We believe Ameren has put forth a really good program that is going to change the game for these customers,” Walter said. “We are really proud of what the (agreement) does.”

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