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Ameren Says Energy Efficiency Hurts Bottom Line

Utility Ameren Missouri plans to cut energy efficiency investments by $5 million next year, down from $25 million this year, in an effort to bolster its bottom line.

The company says it needs to cut its energy efficiency program because shareholders foot the upfront cost for several years before the company recovers the costs, the St. Louis Post-Dispatch reported.

The utility’s efficiency programs offer customer incentives including subsidies for compact fluorescent light bulb and rebates for Energy Star appliances, as well as marketing to raise customer awareness.

The Missouri Energy Efficiency Investment Act instructs investor-owned utilities to pursue all cost-effective energy efficiency programs, and lets regulators compensate utilities for such investments. The state’s Public Service Commission (PSC) voted to approve regulations to implement the law just two weeks ago.

But Ameren Missouri’s vice president of regulatory affairs, Steve Kidwell, said the rules don’t allow the utility to recover costs quickly enough.

“We are still committed to energy efficiency,” Kidwell said. “We want to support energy efficiency; we think it’s a great resource. We just have to figure out a way to do it that’s good for shareholders and good for customers.”

The utility would like to charge customers upfront for the improvements, instead of waiting to collect the funds after money is spent.

A plan published by the utility last year said that energy efficiency alone could reduce energy consumption by 7.3 percent by 2030, but that this would require about $100 million a year.

“If we went after the potential that we’ve seen in our own study, we wouldn’t have to build another power plant for 20 years, and we could retire [58-year-old coal plant] Meramec, and we’d be OK,” Kidwell said. But, he added, “We’d lose $30 million a year. And we just can’t do that. It’s that simple.”

Asking utilities to help customers use less energy is “a request akin to asking Anheuser-Busch to urge Americans to drink less beer,” the Post-Dispatch said.

“This is hugely disappointing,” Rebecca Stanfield, a senior energy advocate for the Natural Resources Defense Council, told the paper. “Their own numbers show that an aggressive energy efficiency plan will keep electricity bills lower than any other plan. The company is looking out solely for its shareholders’ profits.”

Ameren Corp. is a partner on an Illinois clean coal project that won $1 billion in stimulus funds.

Missouri’s renewable electricity standard says that investor-owned utilities in the state must derive 15 percent of their electricity sales from renewable resources including solar, wind, small hydropower, biogas, biomass and fuel cells, by 2021.

Interim standards are 2 percent by 2011, 5 percent by 2014 and 10 percent by 2018.

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One thought on “Ameren Says Energy Efficiency Hurts Bottom Line

  1. 2 comments: 1) This headline is skewed to be a shocker, while in fact what Ameren is saying is something the California regulatory authorities recognized a long time ago – Utility customer energy efficiency is bad for utility shareholders dividends in a business as usual situation. 2) Perhaps the Missouri regulators and legislators need to pay closer attention to how California managed to make customer energy efficiency viable for utilities.

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