Energy Efficiency Goals

Origin In 2009, Missouri enacted the Missouri Energy Efficiency Investment Act, creating a framework for energy savings and peak reduction for investor-owned electric utilities through voluntary investment in demand-side management. Electric Sales and Peak Demand Reduction GoalsThe goals outlined below were created by the Public Service Commission (PSC) in 2010, with benchmarks beginning in the first year a utility program is in effect. Year Annual Sales Reductions Annual Peak Reductions Cumulative Sales Reductions Cumulative Peak Reductions First 0.3% 1.0% 0.3% 1.0% Second 0.5% 1.0% 0.8% 2.0% Third 0.7% 1.0% 1.5% 3.0% Fourth 0.9% 1.0% 2.4% 4.0% Fifth 1.1% 1.0% 3.5% 5.0% Sixth 1.3% 1.0% 4.8% 6.0% Seventh 1.5% 1.0% 6.3% 7.0% Eighth 1.7% 1.0% 8.0% 8.0% Ninth 1.9% 1.0% 9.9% 9.0% Subsequent 1.9% 1.0% -- -- The goal of the Missouri Energy Efficiency Investment Act is to achieve all cost-effective demand-side savings. However, the rules governing demand-side management programs in Missouri explicitly state that "no penalty or adverse consequence will accrue" to a utility not implementing programs that meet these goals, and that these targets should not be considered anything other than a voluntary guideline.Program Administrator TypeThe investor-owned electric utilities affected by this goal administer the programs intended to meet the intent of the goal.Cost-Effectiveness and Program EvaluationTo evaluate the effectiveness of the affected utilities, Missouri uses the Total Resource Cost Test (TRC) as a preferred cost-effectiveness test, one of the five classic "California tests" from the California Standard Practice Manual. The only exceptions to the cost-effectiveness requirement are for programs for educational purposes or for low-income customers, as well as programs for which costs above the level of cost-effectiveness are covered by participants or government credits or incentives.Utility Cost Recovery ProvisionsUtilities are permitted to recover the throughput disincentive associated with estimated lost marginal revenues and the direct costs of running demand-side programs, and the the PSC also permits both Ameren Missouri and the two Kansas City Power & Light utilities (KCP&L & KCP&L Greater Missouri Operations) to receive earnings opportunities The earnings opportunities consist of a portion of the utilities' net shared benefits (the costs avoided by the programs managed by each utility) based on verified annual energy and demand savings. See stipulation and orders for more information (links below). Special ProvisionsCustomers can opt out of charges for demand-side programs if they 1) have one or more accounts within the service territory with demand of at least 5 MW, 2) own and operate an interstate pipeline pumping station, or 3) have an aggregate demand across the service territory of 2.5 MW, and a "comprehensive" demand-side or energy efficiency program and can demonstrate savings at least equal to those expected from utility-provided programs.