Missouri and the Clean Power Plan: Comprehensive State Energy Plan Should Support Compliance

June 18, 2015 | 2:27 pm
Jeff Deyette
Director of State Policy and Analysis

Like many U.S. states, Missouri is on the cusp of an energy transformation. Missouri has been long dependent on electricity generated predominantly from coal-fired power plants, but a suite of market and political factors are slowly beginning to shift the Show-Me state toward cleaner, lower carbon energy sources.

Set for release later this summer, the EPA’s Clean Power Plan (CPP) will further curb carbon emissions in Missouri and across the U.S. power sector. At the same time, a comprehensive State Energy Plan now under development by Governor Nixon’s administration offers an excellent opportunity to prioritize renewable energy and energy efficiency in Missouri’s CPP compliance strategy and accelerate the state’s transition to a clean energy economy.

A legacy of coal dependence

For decades, Missouri has been heavily dependent on coal for its power generation. In 2013, coal accounted for 83 percent of the state’s electricity generation—the fifth most coal-dependent among all states (see pie chart). To generate that power, all of the coal must be imported because Missouri has virtually no coal mining production. In 2012, that amounted to more than $1.4 billion leaving the state, primarily to Wyoming.

Missouri is currently among the nation's most coal dependent states.

Missouri is currently among the nation’s most coal-dependent states. Source: EIA

Missouri’s coal dependence also takes a heavy toll on public health, local air and water quality, and of course, in contributing to climate change. Power plants are our nation’s largest source of global warming emissions and Missouri consistently ranks in the top 10 states for power sector carbon emissions. From heat waves to major flooding, global warming is already impacting Missouri communities.

The winds of change

Fortunately, the coal industry’s grip on Missouri’s power supply is slowly beginning to loosen. In 2008, voters approved a renewable electricity standard (RES) that requires Missouri’s electric providers to supply at least 15 percent of their power from renewable energy sources by 2021.

Missouri’s RES has already helped spur more than 450 megawatts of wind power in the northwest corner of the state, and has driven important economic and environmental benefits. However, this just scratches the surface of how clean energy resources can deliver for Missouri consumers. The state is ranked 14th nationally in terms of wind resource potential and is home to a tremendous amount of potential for solar energy and energy efficiency that remains untapped.

Closing uneconomic coal plants

In addition to investing in more renewables, closing old, inefficient, and uneconomic coal generators is another quick and cost-effective strategy for cleaning up Missouri’s power supply. Ameren Missouri—the state’s largest electric utility—has announced that it will be closing its 564-MW Meramec coal power plant in the next few years. Meramec’s closure joins the nearly 300 coal generating units in 39 states (representing 46,600 MW of power capacity) that have either retired or are scheduled to between 2012 and 2020 thanks to growing competition from cleaner, more affordable energy alternatives. A 2013 UCS analysis identified another 1,635 MW of economically vulnerable coal generators in Missouri alone that should also be considered for retirement.

Making progress toward Clean Power Plan compliance

These sensible commitments to renewable energy and cutting carbon emissions have positioned Missouri well for complying with the EPA’s forthcoming Clean Power Plan.

In fact, a new UCS analysis shows that these existing commitments will put Missouri more than two-thirds of the way towards meeting the 2020 emission reduction benchmarks proposed by the EPA (see bar chart). Thirty additional states are also on track to be more than halfway toward their 2020 benchmarks thanks to existing RES policies, energy efficiency resource standards, and scheduled coal plant retirements.

Missouri needs a comprehensive state energy plan

Missouri's Projected Progress Toward Meeting its 2020 Benchmarks under the Clean Power Plan. Missouri's current renewable electricity standard and decision to close uneconomic coal generators are helping to cut carbon emissions and contributing to the state's compliance with the Clean Power Plan.

Missouri’s Projected Progress Toward Meeting its 2020 Benchmarks under the Clean Power Plan. Missouri’s current renewable electricity standard and decision to close uneconomic coal generators are helping to cut carbon emissions and putting the state far along the pathway toward compliance with the Clean Power Plan.

This is all good progress for one of the most coal-dependent states in the nation. But Missouri can and should do more to accelerate its clean energy transition. That starts with Governor Nixon’s administration developing a compliance strategy for fully meeting the Clean Power Plan’s targets by prioritizing investments in renewables and efficiency. And one effective way to ensure that happens is for the state to develop a comprehensive and aggressive State Energy Plan that also prioritizes clean energy development.

One year ago today, Governor Nixon put the wheels in motion for such a plan when he signed Executive Order 14-06, which instructed the Missouri Department of Economic Development’s Division of Energy to develop—through broad stakeholder input—a comprehensive State Energy Plan. A 55-member governor-appointed steering committee representing a broad range of energy interests helped lead the plan’s development; several public hearings were held; and six technical working groups were convened (of which, several of my colleagues participated in) to explore multiple topics on Missouri’s current and potential future energy use.

Policy recommendations

Initially scheduled for release last month, the State Energy Plan has since been delayed to October 15. While delay is not normally good, in this case it could be a positive. Thus far, discussions on the state’s energy plan have not included considerations for the Clean Power Plan. By postponing until after the final rule’s expected release, Governor Nixon’s team now has a golden opportunity to include recommendations directly related to a compliance strategy that makes Missouri a clean energy leader.

To help ensure that happens, here are three recommendations Governor Nixon’s state energy plan needs to include:

  1. Strengthen the Renewable Electricity Standard. Independent analysis has shown that Missouri can cost-effectively exceed its current 15 percent by 2021 RES. Leading states in the Midwest and nationally have established RES targets of at least 25 percent.
  2. Adopt a mandatory Energy Efficiency Resource Standard (EERS). Missouri currently has voluntary goals for energy efficiency, but the state should join leading states and enact a mandatory EERS requiring utilities to reduce electricity demand by 2 percent annually.
  3. Strengthened net metering policy. Missouri’s current policy for incentivizing rooftop solar investments is inadequate. The state should strengthen its net metering policy to expand the program size, increase system capacity limits, and provide monthly credits for excess power at the retail level.

Investing more heavily in renewable energy and energy efficiency offers a smarter, faster, and less risky pathway toward a more affordable, reliable, and diversified electricity system that delivers not just short-term economic and environmental gains, but also achieves the long-term goals of addressing climate change.

Now is the time for Governor Nixon to lead his state toward a clean energy future.