New law encourages KCP&L to push energy efficiency

Legislation expected to dramatically boost energy efficiency for Missouri electric customers was signed into law Monday by Gov. Jay Nixon.

The law sets out how investor-owned electric utilities in the state can spend money on energy efficiency such as subsidizing homeowners who purchase more efficient air conditioners with the utilities then being allowed to recover the costs and also collect a return on the investment.

Nixon in appearances in Kansas City and St. Joseph said the law is a big shift in that traditionally the incentives for the state’s investor-owned electric utilities were mostly to build power plants and sell electricity since that is where they made their profit. Now, those utilities will also have an incentive to help customers conserve electricity as well.

“That’s what the bill actually does,” he said.

Both Missouri and Kansas have small pilot programs for energy efficiency but Missouri is the first to establish that energy efficiency can routinely be considered by state regulators to be included in rates.

That is expected to fuel energy efficiency to grow to a point that it will at least delay the need for spending money to build additional power plants.

The idea has caused several consumer and environmental groups to support regulatory changes that would encourage energy efficiency including the law passed in Missouri. Electric utilities nationally have said incentives for energy efficiency were crucial.

Kansas City Power & Light was a big supporter of the Missouri law and the utility chartered a Beechcraft King Air 100 airplane to fly a group of the utility’s executives to St. Joseph and then back to Kansas City for Nixon’s appearances Monday. After the plane landed in St Joseph, the group traveled in Ford Escape and Ford Fusion hybrid electrics to attend the press conference about the new law.

KCP&L has big plans to use energy efficiency to keep demand flat for most of the next decade. That plan is now possible because of the new law, said Michael Chesser, chief executive officer of Great Plains Energy Inc., the parent of KCP&L.

“This is a big deal,” he said.

He said the utility will initially encourage and subsidize projects such as more efficient lighting and air conditioners and eventually to other ideas including a distribution system that would be more efficient and give customers more options in how they use electricity.

The new law, called the Energy Efficient Investment Act,gives the Missouri Public Service Commission regulatory authority over it. For instance, state regulators will determine if an energy efficient program is sufficiently productive to allow it to be included in rates.