Energy Efficiency Act Snubs Missouri Historic Tax Credit

Missouri State Senator Brad Lager (R-Savannah) won a legislative victory this year when his Energy Efficient Investment Act passed the General Assembly and was signed into law by Democratic Governor Jay Nixon.

The bill's chief purpose is to allow utilities to recover costs of energy efficiency measures to deter construction of new power plants. Lager wisely has opposed public subsidy to power plant construction. The state's Public Service Commission's rule is that Missouri's electric companies only raise rates if the rates are equal to or less than the rates that the companies would have charged if the company had built a new power plant. That rule encourages more energy output without addressing efficiency.

The bill allows utilities to count toward output energy not being consumed and enables utilities to establish programs where customers receive benefits for demand-side efficiency upgrades.

However, Lager could not resist riding his favorite hobby horse into the bill -- opposition to the state's historic rehabilitation tax credit, which was modified for the first time ever this year in response to Lager's efforts to kill it.

Section 14 of the act states:

Any customer of an electrical corporation who has received a state tax credit under sections 135.350 to 135.362, RSMo, or received under sections 253.545 to 253.561, RSMo, shall not be eligible for participation in any demand-side program offered by an electrical corporation under this section if such program offers a monetary incentive to the customer.

Sections 135.350-362 deal with a range of tax credit programs that Lager also opposes, including the state's low income housing tax credit, but sections 253.545-561 enable the state historic rehabilitation tax credit. Vigilance on the rehabilitation tax credit remains crucial in this post-Jeff Smith era.