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Environmental advocates are raising concerns that a Missouri law enacted last year to speed up utilities’ transition to renewable energy may soon be changed to make it easier for companies to keep coal plants partially open.
Last year, Missouri and Kansas enacted laws allowing electric utilities to “securitize” aging coal plants and retire them early without taking a financial hit so they can turn around and invest in renewable energy. It was a rare compromise that brought together utilities and environmental and consumer advocates.
But this year, lawmakers are considering a change that environmentalists such as the Sierra Club argue could make it easier for utilities to benefit from securitization without fully shuttering their coal plants.
“It s essentially a gaping hole with the whole idea,” said Henry Robertson, an attorney who retired from Great Rivers Environmental Law Center and serves as energy chair for the Sierra Club’s Missouri chapter.
Missouri utilities, however, say the proposed change — which is included in a bill heard Wednesday by the Senate Committee on Commerce, Consumer Protection, Energy and the Environment — simply cleans up language from last year’s legislation.
In a statement, Evergy spokeswoman Gina Penzig said the change was not sought by by the utility “but by senators who wanted to tighten language passed last year.”
“The bill clearly gives the PSC the right to decide,” She said. “(It) simply explains what would happen if the PSC says yes.”
Securitization essentially allows utility companies to refinance the debt they took on to build or improve coal-fired power plants much like someone would refinance their mortgage. A third party issues bonds to repay the utility’s investment in the facility, and ratepayers pay back those bonds at a lower interest rate than the utility was originally set to earn on the investment.
By removing coal plants that environmental groups say are generally more expensive to operate, the utility companies can free up funds to invest in more renewable energy.
Under the Missouri securitization law — as it passed last year — Missouri regulators can permit utilities to keep charging customers to keep coal plants around to provide capacity during extreme weather events, like the cold snap that forced power outages across the Midwest last year.
The amended language, however, takes some discretion away from regulators, Robertson contends.
“They couldn t really take the power away from the commission to do it,” Robertson said, “but they ve weighted it heavily.
An Ameren spokesperson said: This provision aims to provide the Missouri Public Service Commission with the proper authority to ensure customer reliability standards are met in the event of a severe weather situation.
Marc Poston, public council for Missouri ratepayers, said the amended language removed some discretion from the PSC but it likely would not alter practices much.
If the commission determined under existing law that it was “just, reasonable and necessary” for a utility to keep a coal plant in its rates, Poston said he couldn’t see a scenario where they’d exert discretion to not allow it.
“From a customer perspective it probably has no significance,” he said. “From a utility perspective, it establishes more certainty regarding what standard they need to meet.”
The bill’s sponsor, Rep. Michael O’Donnell, R-St. Louis County, said the PSC still had the ultimate authority.
“If the utilities aren’t being prudent with it, they can essentially stop that,” he said.
Both Ameren and Evergy pledged to reach net-zero carbon emissions in the coming decades without securitization. But they supported the legislation last year.
Andy Knott, central region director for the Sierra Club’s Beyond Coal Campaign, said even the language in last year’s legislation allowing utilities to securitize but not fully retire coal plants was an issue. The securitization bill, he said, was not perfect.
But this year’s proposed change would “sweeten the pot” for utilities.
“Basically, it provides more benefit to the utilities and their shareholders and takes away benefit to the consumers who are supposed to be saving money under securitization,” he said.
The proposal has already been approved by the House. The Senate committee took no action on it Wednesday.
The Missouri Independent’s Rudi Keller contributed to this report.
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