HOUSE BILL NO. 2729 103RD GENERAL ASSEMBLY
INTRODUCED BY REPRESENTATIVE APPELBAUM.
4432H.01I JOSEPH ENGLER, Chief Clerk
AN ACT To repeal sections 393.1025 and 393.1030, RSMo, and to enact in lieu thereof two new sections relating to renewable energy resources.
Be it enacted by the General Assembly of the state of Missouri, as follows:
Section A. Sections 393.1025 and 393.1030, RSMo, are repealed and two new 2 sections enacted in lieu thereof, to be known as sections 393.1025 and 393.1030, to read as 3 follows: 393.1025. As used in sections 393.1020 to 393.1030, the following terms mean: 2 (1) "Commission", the public service commission; 3 (2) "Department", the department of [economic development] commerce and 4 insurance; 5 (3) "Electric utility", any electrical corporation as defined by section 386.020; 6 (4) "Renewable energy credit" or "REC", a tradeable certificate of proof that one 7 megawatt-hour of electricity has been generated from renewable energy sources; and 8 (5) "Renewable energy resources", electric energy produced from wind, solar thermal 9 sources, or photovoltaic cells and panels[, dedicated crops grown for energy production, 10 cellulosic agricultural residues, plant residues, methane from landfills, from agricultural 11 operations, or from wastewater treatment, thermal depolymerization or pyrolysis for 12 converting waste material to energy, clean and untreated wood such as pallets, hydropower 13 (not including pumped storage) that does not require a new diversion or impoundment of 14 water and that has a nameplate rating of ten megawatts or less, fuel cells using hydrogen 15 produced by one of the above-named renewable energy sources, and other sources of energy 16 not including nuclear that become available after November 4, 2008, and are certified as
EXPLANATION — Matter enclosed in bold-faced brackets [thus] in the above bill is not enacted and is intended to be omitted from the law. Matter in bold-face type in the above bill is proposed language. HB 2729 2
17 renewable by rule by the department] ; energy storage, but not including pumped storage; 18 and fuel cells using hydrogen or hydrogen as a gaseous fuel, if hydrogen is produced by 19 one of the renewable energy sources in this subdivision. 393.1030. 1. The commission shall, in consultation with the department, prescribe by 2 rule a portfolio requirement for all electric utilities to generate or purchase electricity 3 generated from renewable energy resources. Such portfolio requirement shall provide that 4 electricity from renewable energy resources shall constitute the following portions of each 5 electric utility's sales: 6 (1) No less than [two] fifteen percent [for calendar years 2011 through 2013] before 7 December 31, 2026; 8 (2) No less than [five] twenty percent [for calendar years 2014 through 2017] before 9 December 31, 2031; 10 (3) No less than [ten] forty percent [for calendar years 2018 through 2020] before 11 December 31, 2036; and 12 (4) No less than [fifteen] sixty percent [in each calendar year beginning in 2021] 13 before December 31, 2046; 14 (5) No less than eighty percent before December 31, 2056; and 15 (6) No less than one hundred percent before December 31, 2061. 16 17 At least two percent of each portfolio requirement shall be derived from solar energy. The 18 portfolio requirements shall apply to all power sold to Missouri consumers whether such 19 power is self-generated or purchased from another source in or outside of this state. A utility 20 may comply with the standard in whole or in part by purchasing RECs. Each kilowatt-hour of 21 eligible energy generated in Missouri shall count as 1.25 kilowatt-hours for purposes of 22 compliance. 23 2. (1) This subsection applies to electric utilities with more than two hundred fifty 24 thousand but less than one million retail customers in Missouri as of the end of the calendar 25 year 2024. 26 (2) Energy meeting the criteria of the renewable energy portfolio requirements set 27 forth in subsection 1 of this section that is generated from renewable energy resources and 28 contracted for by an accelerated renewable buyer shall: 29 (a) Have all associated renewable energy certificates retired by the accelerated 30 renewable buyer, or on their behalf, and the certificates shall not be used to meet the electric 31 utility's portfolio requirements pursuant to subsection 1 of this section; 32 (b) Be excluded from the total electric utility's sales used to determine the portfolio 33 requirements pursuant to subsection 1 of this section; and HB 2729 3
34 (c) Be used to offset all or a portion of its electric load for purposes of determining 35 compliance with the portfolio requirements pursuant to subsection 1 of this section. 36 (3) The accelerated renewable buyer shall be exempt from any renewable energy 37 standard compliance costs as may be established by the utility and approved by the 38 commission, based on the amount of renewable energy certificates retired pursuant to this 39 subsection in proportion to the accelerated renewable buyer's total electric energy 40 consumption, on an annual basis. 41 (4) An "accelerated renewable buyer" means a customer of an electric utility, with an 42 aggregate load over eighty average megawatts, that enters into a contract or contracts to 43 obtain: 44 (a) Renewable energy certificates from renewable energy resources as defined in 45 section 393.1025; or 46 (b) Energy and renewable energy certificates from solar or wind generation resources 47 located within the Southwest Power Pool region and initially placed in commercial operation 48 after January 1, 2020, including any contract with the electric utility for such generation 49 resources that does not allocate to or recover from any other customer of the utility the cost of 50 such resources. 51 (5) Each electric utility shall certify, and verify as necessary, to the commission that 52 the accelerated renewable buyer has satisfied the exemption requirements of this subsection 53 for each year, or an accelerated renewable buyer may choose to certify satisfaction of this 54 exemption by reporting to the commission individually. 55 (6) The commission may promulgate such rules and regulations as may be necessary 56 to implement the provisions of this subsection. Any rule or portion of a rule, as that term is 57 defined in section 536.010, that is created under the authority delegated in this section shall 58 become effective only if it complies with and is subject to all of the provisions of chapter 536 59 and, if applicable, section 536.028. This section and chapter 536 are nonseverable and if any 60 of the powers vested with the general assembly pursuant to chapter 536 to review, to delay the 61 effective date, or to disapprove and annul a rule are subsequently held unconstitutional, then 62 the grant of rulemaking authority and any rule proposed or adopted after August 28, 2025, 63 shall be invalid and void. 64 (7) Nothing in this section shall be construed as imposing or authorizing the 65 imposition of any reporting, regulatory, or financial burden on an accelerated renewable 66 buyer. 67 3. The commission, in consultation with the department and within one year of 68 November 4, 2008, shall select a program for tracking and verifying the trading of renewable 69 energy credits. An unused credit may exist for up to three years from the date of its creation. 70 A credit may be used only once to comply with sections 393.1020 to 393.1030 and may not HB 2729 4
71 also be used to satisfy any similar nonfederal requirement. An electric utility may not use a 72 credit derived from a green pricing program. Certificates from net-metered sources shall 73 initially be owned by the customer-generator. The commission, except where the department 74 is specified, shall make whatever rules are necessary to enforce the renewable energy 75 standard. Such rules shall include: 76 (1) A maximum average retail rate increase of one percent determined by estimating 77 and comparing the electric utility's cost of compliance with least-cost renewable generation 78 and the cost of continuing to generate or purchase electricity from entirely nonrenewable 79 sources, taking into proper account future environmental regulatory risk including the risk of 80 greenhouse gas regulation. Notwithstanding the foregoing, until June 30, 2020, if the 81 maximum average retail rate increase would be less than or equal to one percent if an electric 82 utility's investment in solar-related projects initiated, owned or operated by the electric utility 83 is ignored for purposes of calculating the increase, then additional solar rebates shall be paid 84 and included in rates in an amount up to the amount that would produce a retail rate increase 85 equal to the difference between a one percent retail rate increase and the retail rate increase 86 calculated when ignoring an electric utility's investment in solar-related projects initiated, 87 owned, or operated by the electric utility. Notwithstanding any provision to the contrary in 88 this section, even if the payment of additional solar rebates will produce a maximum average 89 retail rate increase of greater than one percent when an electric utility's investment in solar- 90 related projects initiated, owned or operated by the electric utility are included in the 91 calculation, the additional solar rebate costs shall be included in the prudently incurred costs 92 to be recovered as contemplated by subdivision (4) of this subsection; 93 (2) Penalties of at least twice the average market value of renewable energy credits 94 for the compliance period for failure to meet the targets of subsection 1 of this section. An 95 electric utility will be excused if it proves to the commission that failure was due to events 96 beyond its reasonable control that could not have been reasonably mitigated, or that the 97 maximum average retail rate increase has been reached. Penalties shall not be recovered from 98 customers. Amounts forfeited under this section shall be remitted to the department to 99 purchase renewable energy credits needed for compliance. Any excess forfeited revenues 100 shall be used by the division of energy solely for renewable energy and energy efficiency 101 projects; 102 (3) Provisions for an annual report to be filed by each electric utility in a format 103 sufficient to document its progress in meeting the targets; 104 (4) Provision for recovery outside the context of a regular rate case of prudently 105 incurred costs and the pass-through of benefits to customers of any savings achieved by an 106 electrical corporation in meeting the requirements of this section. HB 2729 5
107 4. As provided for in this section, except for those electrical corporations that qualify 108 for an exemption under section 393.1050, each electric utility shall make available to its retail 109 customers a solar rebate for new or expanded solar electric systems sited on customers' 110 premises, up to a maximum of twenty-five kilowatts per system, measured in direct current 111 that were confirmed by the electric utility to have become operational in compliance with the 112 provisions of section 386.890. The solar rebates shall be two dollars per watt for systems 113 becoming operational on or before June 30, 2014; one dollar and fifty cents per watt for 114 systems becoming operational between July 1, 2014, and June 30, 2015; one dollar per watt 115 for systems becoming operational between July 1, 2015, and June 30, 2016; fifty cents per 116 watt for systems becoming operational between July 1, 2016, and June 30, 2017; fifty cents 117 per watt for systems becoming operational between July 1, 2017, and June 30, 2019; twenty- 118 five cents per watt for systems becoming operational between July 1, 2019, and June 30, 119 2020; and zero cents per watt for systems becoming operational after June 30, 2020. An 120 electric utility may, through its tariffs, require applications for rebates to be submitted up to 121 one hundred eighty-two days prior to the June thirtieth operational date. Nothing in this 122 section shall prevent an electrical corporation from offering rebates after July 1, 2020, 123 through an approved tariff. If the electric utility determines the maximum average retail rate 124 increase provided for in subdivision (1) of subsection 3 of this section will be reached in any 125 calendar year, the electric utility shall be entitled to cease paying rebates to the extent 126 necessary to avoid exceeding the maximum average retail rate increase if the electrical 127 corporation files with the commission to suspend its rebate tariff for the remainder of that 128 calendar year at least sixty days prior to the change taking effect. The filing with the 129 commission to suspend the electrical corporation's rebate tariff shall include the calculation 130 reflecting that the maximum average retail rate increase will be reached and supporting 131 documentation reflecting that the maximum average retail rate increase will be reached. The 132 commission shall rule on the suspension filing within sixty days of the date it is filed. If the 133 commission determines that the maximum average retail rate increase will be reached, the 134 commission shall approve the tariff suspension. The electric utility shall continue to process 135 and pay applicable solar rebates until a final commission ruling; however, if the continued 136 payment causes the electric utility to pay rebates that cause it to exceed the maximum average 137 retail rate increase, the expenditures shall be considered prudently incurred costs as 138 contemplated by subdivision (4) of subsection 3 of this section and shall be recoverable as 139 such by the electric utility. As a condition of receiving a rebate, customers shall transfer to 140 the electric utility all right, title, and interest in and to the renewable energy credits associated 141 with the new or expanded solar electric system that qualified the customer for the solar rebate 142 for a period of ten years from the date the electric utility confirmed that the solar electric 143 system was installed and operational. HB 2729 6
144 5. The department shall, in consultation with the commission, establish by rule a 145 certification process for electricity generated from renewable resources and used to fulfill the 146 requirements of subsection 1 of this section. Certification criteria for renewable energy 147 generation shall be determined by factors that include fuel type, technology, and the 148 environmental impacts of the generating facility. Renewable energy facilities shall not cause 149 undue adverse air, water, or land use impacts, including impacts associated with the gathering 150 of generation feedstocks. If any amount of fossil fuel is used with renewable energy 151 resources, only the portion of electrical output attributable to renewable energy resources 152 shall be used to fulfill the portfolio requirements. 153 6. In carrying out the provisions of this section, the commission and the department 154 shall include methane generated from the anaerobic digestion of farm animal waste and 155 thermal depolymerization or pyrolysis for converting waste material to energy as renewable 156 energy resources for purposes of this section. 157 7. The commission shall have the authority to promulgate rules for the 158 implementation of this section, but only to the extent such rules are consistent with, and 159 do not delay the implementation of, the provisions of this section. Any rule or portion of a 160 rule, as that term is defined in section 536.010, that is created under the authority delegated in 161 this section shall become effective only if it complies with and is subject to all of the 162 provisions of chapter 536 and, if applicable, section 536.028. This section and chapter 536 163 are nonseverable and if any of the powers vested with the general assembly pursuant to 164 chapter 536 to review, to delay the effective date, or to disapprove and annul a rule are 165 subsequently held unconstitutional, then the grant of rulemaking authority and any rule 166 proposed or adopted after August 28, 2013, shall be invalid and void. ✔
Statutes affected: