2012 PSC Annual Report - Missouri Public Service Commission

REGULATORY ACTIVITYalleged deficiencies and concerns identified by the participantsto this file in its next triennial Integrated Resource Plan”.Missouri Energy Efficiency Investment ActThe Missouri Energy Efficiency Investment Act (MEEIA),393.1075 RSMo Supp. 2010, was passed by the Missourilegislature and signed by Governor Nixon in 2009. Thepurpose of this act was to encourage investor-ownedelectric utilities to develop and implement demand-sidemanagement programs.Rules 1 to implement MEEIA became effective May 30, 2011.As a result of these rules, in December 2011, electric utilitiesbegan making filings requesting approval of demandsideprograms and a demand-side program investmentmechanism (DSIM) to recover demand-side program costs,lost revenues and performance incentives.KCP&L Greater Missouri Operations GMOCase No. EO-22-9On December 22, 2011, GMO filed a MEEIA case with theCommission seeking approval of demand-side programs(including both energy efficiency and demand-side programs),and a DSIM that will include cost recovery of demand-sideprogram costs, a portion of the net shared benefits, lostrevenues and a performance incentive mechanism.Under this proposal, GMO states it would incurapproximately $38.8 million in demand-side program costsover the next three years. GMO anticipates that programs willresult in $105.1 million 2 in total customer benefits (net ofprogram costs) and have a cumulative annual energy savingsof approximately 155 GWh and cumulative annual demandsavings of approximately 73 MW during the third programyear. This case is currently pending before the Commission.Ameren MissouriCase No. EO-22-2On January 20, 2012, Ameren Missouri filed a MEEIA casewith the Commission seeking approval of a broad portfolioof energy efficiency programs, a Technical Resource Manual(TRM) and a DSIM. The proposed DSIM included costrecovery mechanism(s) for program costs, lost revenuesand performance incentives.The Commission approved an agreement on August 1,2012, which included approximately $147 million in energyefficiency program costs over the next three years. The newenergy efficiency programs are expected to be implementedon January 2, 2013. The programs are anticipated to resultin $336.6 million 3 in total customer benefits (net of programcosts) and have a cumulative annual energy savings ofapproximately 793 GWh during the third program year.Federal Environmental RegulationsCase No. E-22-65On August 30, 2011, the Commission opened aninvestigation into the cost of complying with federalenvironmental regulations, directing the Commission staffto lead a working group and draft a report describing theeffects of federal regulations on Missouri’s electric industry.Staff held workshops and sought input from stakeholdersand on May 1, 2012, filed a report on the cost of compliancewith federal environmental regulations. Staff’s analysisindicates the overall cost to Missouri electric utilities andpotentially its customers would be in an approximate rangeof $1.98 billion to $3.276 billion.Renewable Energy StandardsCase No. E-22-255The Commission’s renewable energy standards rules (4CSR 240-20.100 and 4 CSR 240-3.156) took effect on May30, 2011. The Commission opened a case to “draw on theexperience gained regarding the operation of those rulesto consider ways in which the rules might be improved.” Aworkshop discussing those rules was held on April 17, 2012.Cybersecurity PracticesCase No. E-23-On July 17, 2012, the Commission issued an orderrequesting information to address effective cybersecuritypractices for protecting essential electric utilityinfrastructure. In its order, the Commission noted, “Theelectric power industry is increasingly incorporatinginformation technology (IT) systems and networks intoits existing infrastructure as part of nationwide efforts –commonly referred to as the “smart grid,” which is aimedat improving reliability and efficiency and facilitating theuse of alternative energy sources such as wind and solar.”The Commission further noted that, “[I]ncreased relianceon IT systems and networks also exposes the grid tocybersecurity vulnerabilities, which can be exploited byattackers.”The Commission directed regulated electric utilitiesto answer a series of 47 questions related to planning,standards, procurement practices, personnel and policiesand systems and operations by August 31, 2012. Onceanswers are received, the Commission will determine howto proceed.1MEEIA rules include 4 CSR 240-3.163, 4 CSR 240-3.164, 4 CSR 240-20.093,and 4 CSR 240-20.094.2NPV of 15 years at 6.95%3NPV of 20 years at 6.95%PSC Annual Report 3