The Missouri Public Service Commission has determined that a Missouri Energy Efficiency Investment Act (MEEIA) plan proposed by Ameren Missouri for the next three year period failed to meet the requirements under Missouri law.

The Missouri Public Service Commission has determined that a Missouri Energy Efficiency Investment Act (MEEIA) plan proposed by Ameren Missouri for the next three year period failed to meet the requirements under Missouri law. As a result, the Commission voted unanimously (5-0) to not accept Ameren Missouri’s proposal. It is the Commission’s hope that Ameren Missouri will consider the Commission’s decision and present a new MEEIA plan that all parties and the Commission can support.

“In essence, MEEIA is designed to encourage Missouri’s investor-owned utilities to offer and promote energy efficiency programs and projects designed to reduce the amount of electricity used by the utility’s customers,” said the Commission. “The law recognizes that under traditional regulation, a utility has a strong financial incentive to sell as much electricity to its customers as possible because more sales result in greater profits. MEEIA creates an opportunity to change that financial incentive to better align the utility’s financial interest with the public interest in encouraging the efficient use of energy.”

“MEEIA is permissive in nature and, by its express language, does not require utilities to offer demand-side programs,” said the Commission. “MEEIA allows such demand-side programs only so long as those programs are approved by the Commission, result in measurable demand or energy savings, and are beneficial to all customers. The Commission is thus responsible for reviewing a utility’s MEEIA plan and determining whether the plan accomplishes the goals of MEEIA.”

The Ameren Missouri MEEIA plan considered in this case would cover the years 2016-2018 and would cost ratepayers upwards of $250 to $300 million over the three years. The Commission determined the plan did not have adequate mechanisms in place to verify that, in fact, all ratepayers were benefitting from the MEEIA programs and not just those ratepayers participating in the programs.

“Simply put, the Commission would approve a MEEIA plan if non-participating ratepayers would be better off paying to help some ratepayers reduce usage than they would be paying a utility to build a power plant. Unfortunately, that is not the case here,” said the Commission. “The evidence in this case shows that most Ameren Missouri customers will likely receive very little, if any, overall net benefits from the Utility Plan. Approximately 87% of Ameren Missouri’s customers are residential customers. And a vast majority of those do not participate in MEEIA.”

The Commission noted that without a mechanism such as retrospective Evaluation, Measurement and Verification (EM&V), it would be impossible for anyone to know how much Ameren Missouri collects from customers for energy savings that never materialized. “It is clear Ameren Missouri has been over-compensated under Cycle 1, and it is almost certain the over- compensation would be exacerbated under the Utility Plan,” said the Commission. “However, without retrospective EM&V, it would be impossible for anyone to know how much Ameren Missouri collects from customers for energy savings that never materialized.”

The Commission also determined that it could not approve a plan that rewards a company for reductions in demand without requiring the company to show it has foregone supply-side earnings related to that reduction in demand.

“The Commission is well aware of the value of MEEIA and continues to support the policies MEEIA established for the state of Missouri. Ameren Missouri’s Cycle 1 Plan laid the groundwork for MEEIA implementation in all Missouri’s regulated utilities, and the company is to be commended for that leadership. However, the Commission cannot approve a MEEIA plan in this case that results in ratepayers paying for more energy savings than the MEEIA plan actually causes. Furthermore, even if the proposed plan included a mechanism for measuring actual energy savings, the Commission cannot approve a plan that rewards the company for reductions in demand without requiring the company to show it has forgone supply-side earnings related to that reduction in demand.”