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Missouri Voters Will Have to Try Again for Energy Self-Reliance

| Written by John Farrell | No Comments | Updated on Jun 29, 2011 The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/missouri-voters-will-have-try-again-energy-self-reliance/

Missouri State CapitolHow many times must Missouri voters tell their government that they want clean, local energy and its economic benefits? 

They should try 21 times.  That’s how much more in-state economic benefit can be gained from developing local energy rather than trying to keep rates low with energy imports.

In 2008, voters approved – with 66% percent of the vote – a referendum establishing a 15% renewable energy standard.  The law also required utilities to get the renewable energy within Missouri or surrounding states.  In January, however, the state legislature stripped that part of the law, allowing Missouri utilities to import renewable energy from anywhere, even if that electricity never physically reaches Missouri ratepayers. 

Renewable energy advocates even tried to reach a compromise with utility lobbyists, reducing the mandate by half but keeping the geographic restriction. 

If the measure had passed, it would have guaranteed Missouri “a coal-sized plant of renewable energy over the next decade,” [Rep.] Holsman said. “That means a vast array of economic development, including sales, installation, service and manufacturing jobs for Missouri. It means not having to worry about EPA regulations or adjusted fuel costs for the investment.”

The measure failed, however, because consumer groups thought importing wind power from elsewhere would be cheaper and utilities wanted ratepayers to front the cost for permits for new nuclear power plants (despite the horrendous economics of such power plants).

The irony is that Missouri has strong, local renewable energy resources.  According to a 2010 report by the National Renewable Energy Laboratory, Missouri could generate three times its electricity consumption from high-quality, in-state wind power.  The cost for this wind power would be 6 to 7 cents per kilowatt-hour (kWh) without the federal tax credit, and less than 5 cents per kWh including the incentive.  This compares to average residential retail rates of 8-9 cents.  Even solar PV is fairly affordable, with a levelized cost (including the 30% federal tax credit) of just 15 cents per kWh (with an installed cost of $3.50 per Watt).  Missouri has enough sun and roofspace to get 21% of its electricity from rooftop solar PV.

The cost savings from importing cheaper wind power pale in comparison to the economic benefits of building locally.  The cheapest wind power in the U.S. would be – at best – about 1.5 cents per kWh less than wind power generated in Missouri.  If it could (impossibly) be delivered to the state with zero transmission cost, the savings to ratepayers of getting 100% of their electricity from wind would be $1.3 billion.

However, the economic impact of in-state wind power is $1 million per megawatt (MW), according to the American Wind Energy Association.  The state would need 28,000 MW of wind power to match its electricity consumption (with a 35% capacity factor), for an economic impact of $28 billion, 21 times the savings from importing out-of-state wind.  Furthermore, if those turbines were also owned by Missourans, the economic impact would rise 1.5 to 3.4 times higher, from $42 to $95 billion. 

The repeal of the geographic requirement in Missouri’s renewable energy law is penny-wise and (21 times) pound-foolish. 

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About John Farrell

John Farrell directs the Energy Self-Reliant States and Communities program at the Institute for Local Self-Reliance and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. More

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