Missouri Gov. Mike Parson on Wednesday signed legislation environmentalists fear will chip away at a year-old state law meant to encourage utilities to retire polluting coal plants.
One of the state's largest utilities -- Evergy -- said the law is simply cleanup language.
Last year, Missouri and Kansas enacted laws allowing electric utilities to "securitize" aging coal plants and retire them early without taking as large a financial hit so they can invest in more renewable energy. It was a rare compromise that brought together utilities and environmental and consumer advocates.
The legislation Parson signed Wednesday, however, might make it easier for utilities to benefit from securitization without fully shuttering coal plants, Henry Robertson, the Missouri Sierra Club's energy chair, said this spring.
"It's essentially a gaping hole with the whole idea," said Robertson, an attorney who retired from Great Rivers Environmental Law Center.
On Wednesday, Robertson called the bill, which also includes some provisions promoting solar energy, "a mixed bag" for the environment.
Evergy's spokeswoman, Gina Penzig, said in an email the bill "contains provisions that benefit Evergy and our customer" but didn't directly address securitization. She said another provision offering discounted rates to new commercial-scale energy users, like manufacturers and data centers, has attracted new investment and jobs to Missouri.
Securitization allows utility companies to refinance remaining debt on coal-fired power plants so they can shut them down while still earning a return on their investment. Otherwise, they would have to continue paying debt while also building or buying another source of energy for their customers.
Through securitization, a third party issues bonds to repay the utility's investment and customers of the utility pay back those bonds at a lower interest rate than the utility was originally set to earn on the investment.
By removing coal plants that environmental groups said are generally more expensive to operate, the utility companies can free up funds to invest in more renewable energy.
Under the Missouri securitization law -- as it passed last year -- Missouri regulators can permit utilities to keep charging customers to keep coal plants around to provide capacity during extreme weather events, like the cold snap that forced power outages across the Midwest last year.
Robertson said the provision removes some discretion from the Missouri Public Service Commission, which regulates utilities.
The Sierra Club opposed the change to the securitization law in another bill before it was bundled with other provisions. A fact sheet put together by the environmental group said the original provision permitting the PSC to allow utilities to keep coal plants at the ready was already "problematic." The change makes it worse.
"This would further negate the benefits that securitization is supposed to provide in reducing pollution and costs to consumers," the fact sheet says.
Ameren and Evergy pledged to reach net-zero carbon emissions in the coming decades without securitization. But they supported the legislation last year.
The bill also includes some pro-solar energy provisions.
It provides companies a sales tax exemption on solar energy systems and prohibits restrictive covenants in homeowners' deeds that don't allow solar energy to be installed, which Robertson said was a persistent problem.
The Missouri Independent, www.missouriindependent.com, is a nonprofit, nonpartisan news organization covering state government and its impact on Missourians.