A legislative committee considering Missouri’s energy future has heard some pretty bleak testimony.
Public Service Commission Chairman Robert Clayton III tells committee members they have drawn a tough assignment.
“You have chosen a title or the General Assembly selected a title on Missouri’s energy future, which frankly is clouded in a great deal of uncertainty right now,” Clayton tells the Joint Committee on Missouri’s Energy Future meeting at the Capitol.
That, according to Clayton, is due to many factors, foremost being the uncertainty coming out of Washington, D. C. with Congress poised to require drastic cutbacks in coal-fired energy production, which provides nearly 80% of Missouri’s electricity. Though the committee plans to discuss more extensively the impact cap and trade legislation could have on Missouri next week, the topic wasn’t far from the thoughts of each person who testified before it. Clayton says that no matter how it is evaluated, any restriction on carbon emissions will have a negative impact on any state that relies on coal-fire electricity generation.
Missouri has a history of using coal-fired plants, with Kansas City Power and Light building a second coal plant at Iatan, just north of Kansas City. Missouri’s major electric utilities, AmerenUE of St. Louis, Kansas City Power and Light and Empire District Electric of Joplin all rely heavily on coal as does the electric cooperatives throughout the state. Coal has allowed Missouri to boast of being one of the cheapest energy states in the nation, a boast that might not soon stand.
Then there is Proposition C. Voters approved the initiative petition in November of 2008 which requires Missouri utilities to produce 2% of its power through renewable sources by 2011. That requirement rises to 5% by 2014, 10% by 2018 and, finally, capping at 15% by 2021. Work is ongoing in the state to increase the generation of wind power, especially in northwest Missouri. Solar has been slow to come online.
Then, Missouri Energy Development Association Director Warren Wood says Missouri’s largest utilities struggle to maintain access to the credit they need to maintain cash flow and invest.
“We’re typically one to two steps right now above losing credit worthiness,” says Wood “And you think access to capital, or interest rates, are a problem now, wait until you can’t get it at all or they require collateral postings and we’re done investing. We can’t face that situation.”
The Missouri Energy Development Association is a trade association that represents the state’s investor-owned utilities: Ameren, KCP&L and Empire.
Wood says Missouri now receives 78% of its energy from coal, 11% from nuclear sources, 7% from renewable sources and 4% from natural gas. Of the renewable sources, 4% is generated by hydro-electric plants with 1% generated through wind turbines. Solar power has yet to provide any significant generation in Missouri, though Proposition C requires that 2% of the state’s energy eventually come from solar power.
Missouri ranks high on the list of states with cheap energy, usually ranked 7th, always ranked in the top ten among states. Witness testimony worries that events out of the state’s control could turn that standing upside down.