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First Person: Missouri Offers Business Sustainable Energy Incentives

Area Development's editor recently spoke with Chris Chung, CEO of the Missouri Partnership about the RES proposition passed by Missouri voters in November 2008, which requires electric companies to either generate or purchase 2 percent of the electricity they sell from renewable sources - increasing to 15 percent by 2021.

Winter 2011
Can you explain the reasoning behind the Renewable Energy Standard (RES) being passed in states across the nation?
Chung: Most states, like Missouri, look at an RES (or an RPS, Renewable Portfolio Standard) as a way not just to embrace alternative forms of energy generation, but also to stimulate the market for new energy technologies like biomass, wind, and solar. This increased demand spurs the need for investment by companies that manufacture systems and components (e.g., wind turbines) or provide services (e.g., wind turbine maintenance and repair) to support the generation of renewable energy. It is hoped that this, in turn, leads to jobs and investment resulting from these added manufacturing and service activities.

What are the requirements with regard to geographic sourcing?
Chung: Missouri's policymakers are in the process of finalizing this provision in its RES, and already a number of groups have weighed in on the issue. On one side are those who believe that Missouri's investor-owned utilities should be able to satisfy the RES requirements with renewable energy credits attributable to renewable energy generation facilities anywhere in the world. On the other side are those who believe that the geographic sourcing provision should require the energy to be generated in or adjacent to Missouri. The latter group is emphasizing the potential economic development benefits of growing the market for renewable energy generation in and around Missouri, while the former group is concerned about holding down any cost increases for consumers of electricity.

Do the rules apply to all of Missouri's utilities or just those that are investor-owned?
Chung: Missouri's RES applies only to investor-owned utilities, though the rural electric cooperatives in the state, as well as a number of municipally owned utilities, are voluntarily adding significant renewable energy resources to their generation portfolios.

Is this just a Missouri issue or is it occurring in other states as well?
Chung: Many states that have passed an RES have no doubt looked at how best to implement the standard in a way that seeks to balance the concerns of renewable energy proponents, economic developers, and current electricity consumers in those states.

What particular incentives is the state offering for renewable energy projects?
Chung: Among the incentives aimed at spurring the renewable market in Missouri (in addition to the 15 percent by 2021 renewable energy standard) are net-metering (a.k.a. the "Easy Connection Act," adopted in 2007) and Property-Assessed Clean Energy (PACE) legislation, adopted in 2010. These provisions make it attractive for individuals and business owners to consider the addition of wind, solar, and other renewable energy generation at their homes and commercial facilities.

What does all this mean to the readers of Area Development magazine, i.e., the corporate executives considering facility location and expansion?
Chung: Missouri has made "Energy Solutions," including the field of renewables, one of its seven targeted industry sectors. The state's policies demonstrate a continued support for and commitment to growth in the clean energy sector. As the renewables market ramps up in Missouri due to policies in place, these policies augment the state's existing location strengths like transportation access and low business costs, making the state even more attractive for supply-chain activities.

Can you cite examples of any location decisions that have been made in recent months that were impacted by the state's renewable energy resources and/or rules?
Chung: In December 2010, Missouri welcomed to its business community two wind energy component manufacturers - Vest-Fiber, a Danish producer of fiberglass assemblies for wind turbine blades, and Nordic WindPower, a U.S.-maker of wind turbine nacelles. Both companies are establishing new operations in Missouri - Vest-Fiber in Moberly, and Nordic in Kansas City - and will both benefit from the state's adoption of a RPS and proximity to the U.S. wind energy corridor.

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