As part of the settlement agreements under the Missouri Energy Efficiency Investment Act (MEEIA) cycle 4 regulatory proceedings, funding was established for a “Statewide MEEIA Feasibility Study,” in which a consultant conducts a review of current demand side management programs nationally and reports findings in an uncontested workshop docket. As laid out in the Commission’s orders, the study must include a literature review of programs across the country covering their governing structure, current implementation and cost sharing, and opportunities for economies of scale with bulk purchasing. The study must also include detailed recommendations for legislation to enable a statewide administrator. This study will help the Missouri Public Service Commission decide if the state should transition its energy efficiency programming to a statewide administrator model.

The Office of Public Counsel advocated for creating a statewide EE program administrator rather than continuing with utility-run programs, but there are important considerations to ensure the model would be effective. A statewide EE administrator can take a variety of forms, depending on which model the feasibility study suggests. Each administrator model for EE programs – a utility administrator, a state administrator, a third-party administrator or a hybrid of the models – has distinct strengths and weaknesses.

A statewide administrator for EE programs can benefit consumers by streamlining delivery of programs and coordinating with other state and federal funding sources for similar work – like health and safety upgrades, weatherization and deep building retrofits. A drawback to a statewide administrator model is that EE programs can get caught up in politics, with possible funding shifts depending on the current state administration and their priorities, leading to a lack of continuity in programs. We saw this in Wisconsin, where Governor Scott Walker made several attempts to restrict or redirect funding for its statewide efficiency program, Focus on Energy. Governor Walker succeeded in 2016, when he signed legislation that modified Focus’ funding structure, cutting over $7 million from the program. In that same year, the Governor redirected $5 million in Focus funds to pay for broadband vouchers.

In the Midwest, most states have utility-administered EE programs. The exceptions are Wisconsin, which has a third-party administrator, and Indiana, Michigan and Nebraska, who each have hybrid models. Several states also have different administrators for their low-income programs than they do for general EE programs because these income-qualified offerings need to be managed differently than standard market rate programs.

If Missouri does move to a statewide administrator, the State should also enable investor-owned gas utilities to recover costs of their EE programs to incentivize their participation. With increasing demand for energy, making the system as efficient as possible is the cheapest way to get the most bang for customers' hard-earned buck. Missouri leaders who are interested in improving energy reliability and affordability in their state should commit to effective energy efficiency program administration – whether utility or state-based. We saw significantly smaller energy efficiency portfolios approved during the last MEEIA cycle, in large part due to opposition from Public Service Commission Staff and the Office of Public Counsel. We hope that regardless of which model the study recommends that energy efficiency programs can once again expand and thrive in Missouri, considering the plethora of benefits EE programs have provided Missourians.  

MEEA will continue to follow the development of this Statewide MEEIA Feasibility Study. Read the Policy Insider for all the latest updates on Missouri energy efficiency policy.