A fee for using less energy?
by Associated Press
Monday, July 6, 2009

JEFFERSON CITY, Mo. — Some Missouri residents and businesses could soon see a new charge on their electric bills — a fee for using less energy.

Though it might seem illogical, the new energy efficiency charge has support from utilities, most lawmakers, the governor, environmentalists and even the state’s official utility consumer advocate. The charge covers the cost of utilities’ efforts to promote energy-efficiency and cut power use.

The assumption is that charging consumers for those initiatives ultimately will cost less than charging them to build the new power plants that will be needed if electricity use isn’t curtailed.

Legislation pending before Gov. Jay Nixon would set the criteria for state utility regulators to approve the energy-savings charges. If he signs the bill, the new law would take effect Aug. 28.

“To save power is the equivalent of making power,” Nixon said, “and it’s a pretty seismic shift” in Missouri’s energy strategy.

Usually, regulators allow utilities to recoup the cost of building power plants or buying more power to meet customer demand. Recently, the Missouri Public Service Commission began allowing some utilities to pass along to customers the cost of programs that reduce demand for electricity.

Kansas City Power & Light Co. already has 19 energy-efficiency and demand-reduction programs, said Chuck Caisley, the company’s senior director of public affairs. He said the PSC is allowing the company to recoup up to $50 million of the programs’ costs under a rate plan in effect through 2010.

One of the company’s more popular energy-saving initiatives has provided free programmable thermostats to about 34,000 residential customers in Missouri and Kansas. KCP&L can remotely control the devices to reduce the frequency at which air conditioners run during peak demand times.

KCP&L was among the leading advocates for the Missouri legislation.

The legislation applies to KCP&L, AmerenUE and The Empire District Electric Co., the publicly traded utilities that serve nearly three-fourths of the state’s population.

The U.S. Environmental Protection Agency estimates that energy-saving programs offered by utilities will add about 3 percent to the average electricity rates. But it says customers who participate in the programs could save 10 percent to 20 percent on their energy bills.