Dive Brief:
- Ameren Missouri told the Missouri Public Utilities Commission it will need 1,200 megawatts of natural gas generation at a cost of $2 billion to comply with the interim 2020 target of EPA’s proposal to cut Missouri’s greenhouse gas emissions 21% from 2005 levels by 2035.
- Because the EPA timeline requires lower emissions natural gas plants to replace Ameren’s 60 year old, 840 megawatt Meramec coal plant before its scheduled 2022 closure, it will force a 10% to 15% rate increase on utility customers by 2020, according to an Ameren spokesperson
- Ameren also told the commission it has its own plan that would take several years longer but save $4 billion. Ameren said its plan would push compliance with the EPA 2020 target to the mid-2030s but would keep rates from rising more than “a couple percent” by 2020,
Dive Insight:
The EPA rule calls for state compliance strategy proposals by 2015 that would be finalized in 2016 but court challenges could greatly change the strategies and the timeline.
Environmentalists argued Ameren could meet the EPA rule with investments in energy efficiency, solar, and wind without the need for higher rates because efficiency programs avoid the need for new generation under the EPA proposal. Environmentalists also said Ameren and other utilities are biased against solutions that do not include new generation.
Ameren said efficiency will accomplish less than environmentalists think because affordable efficiencies are already in place and new efficiencies will cost more but achieve less.
Adding to the debate, new natural gas plants could create supply shortages for Missouri utilities because pipelines may not be adequate to meet both heating and electricity generation needs during a demand spike.
