The states of Missouri and Arizona have taken steps towards redefining renewable energy requirements as part of their restructuring regulations. In Missouri, the governor-appointed energy policy task force submitted its final report on recommendations for Missouri’s energy policy. That report includes recommendations for the development of renewable energy sources. Arizona’s renewable energy requirements have been resolved via a settlement agreement between the Residential Utility Consumer Office ("RUCO") and the Arizona Corporation Commission ("ACC").
The Missouri energy policy task force was appointed by Governor Holden in February 2001 to make recommendations for the State’s energy policy. Missouri has not yet adopted electrical deregulation legislation, although bills proposing limited restructuring have been proposed in the 2001 legislative session. The Final Report of the Missouri energy policy task force, presented to Governor Holden on October 16, 2001 (the "Report"), specifically discusses Missouri’s strengths in terms of renewable energy and makes certain recommendations. The Report states that Missouri is comparable to Florida in terms of the potential for use of solar resources, and also notes that methane is available from landfills, animal waste systems and wastewater treatment plants. The Report further notes that, as a farm state, Missouri generates a significant amount of crop waste. Biomass, in the form of cellulose fiber from sawmills, forest product industries, urban tree residue sites and solid wastes is also identified as an available resource which can be burned in small percentages with coal in many existing boilers. The report notes that by utilizing biomass waste products, costs associated with waste treatment are avoided and an economic benefit is produced instead. "If one-half of the energy content of these available biomass resources were used in technology that is as efficient as the average American electric generation plant, the net energy delivered to users annually would be 15.2 million MWh."
The Report recommends that each electric utility should be required to generate a portion of its electricity from renewable sources. Specifically, 0.25% of retail sales of each utility after 2003 should consist of electricity generated from renewable sources. After 2006, the percentage should increase to 1.6%, 3% after 2009, and 6% after 2015. The Report suggests that scheduling the increase in renewable energy requirements will help drive the demand for the renewable equipment manufacturing industry, which will result in the lowering of costs for such equipment.
The Report also recommends that Missouri pass legislation to enable those generating less than 100 KW of electricity with renewable fuel to participate in net metering and to enter into simplified interconnection agreements without new fees. Financial incentives for the installation of equipment for generating electricity from renewable sources are also recommended.
In Arizona, electric retail competition has been implemented, but the implementation of the state’s environmental portfolio standard ("EPS") has been delayed due to litigation between RUCO and the ACC. The litigation challenged an order by the ACC which approved the EPS, enacted rules which implemented the EPS, established a surcharge to finance the EPS and required affected utilities to file tariffs to implement the surcharges, called environmental portfolio tariffs. RUCO and the ACC settled the suit November 27, 2001. The settlement agreement between RUCO and the ACC grants RUCO the right to intervene in all environmental portfolio tariff proceedings and to request relief from the ACC based on its analysis of the filings and proceedings. In addition, the settlement agreement provides that the proposed EPS surcharges are temporary until the ACC makes "fair-value" findings in the environmental portfolio tariff proceedings.
Arizona’s EPS requires load-serving entities to derive at least .2% of the total retail electricity sold from renewable sources. The required percentage will increase annually by .2% until 2006, when it will increase to 1.05%, and to 1.1% after 2007. The EPS also requires that at least half the required renewable sources must be derived from solar electricity sources. By 2004, 60% of renewable energy sources must be solar electricity sources.