Category Archives: Energy

The War on Coal Gets Real

Missouri is lucky to have some of the lowest electric rates in the country. But that might not always be the case. With a heavy reliance on coal and aging infrastructure, Missouri’s cheap electric rates are in serious jeopardy – and it just got a little bit worse today.

The New York TImes reports the Obama administration has fired the first serious shot in his War on Coal. The EPA has proposed a new rule limiting carbon dioxide emissions from new coal plants to just over half of the current average for plants with advanced technology. In practice, this likely means there will not be any more coal-fired power plants built in the United States. And since coal is the cheapest way to produce electricity, costs will go up. 

The Times, however, also reports that this is just the first shot – and that the EPA will spend the next year developing a rule to place carbon emission limits on existing plants. Because Missouri electricity comes most from coal-fired power plants, this coming rule will hit Missouri families directly in the pocket-book as utilities will likely be forced to either shut down plants or spend huge amount of money retrofitting their coal-fired plants.

We’ve known this was on the way for quite a while. That’s why I’ve consistently supported legislation to make it easier for power producers to upgrade Missouri’s electric infrastructure and invest in new nuclear power plants. Unfortunately, those efforts have been stymied – mainly by big business interests controlled by Wall Street hedge fund managers and publicly traded companies more concerned about how “the Street” will react to their next quarterly earnings report than to long-term reliable and cheap power in our state.

Now that President Obama has fired the first serious shot in the War on Coal, it is my hope that we can pass legislation to help ensure affordable energy for Missouri families, businesses, and schools for decades to come. 

Solyndra Meets AIG – Obama Pushes to Securitize Renewable Energy Just Like Toxic Mortgages

Gee, how could this go wrong? The WSJ reports the Obama administration is working with friends on Wall Street to spur growth of renewable energy by securitizing the industry just as Wall Street did for mortgages and credit card debt.

Solyndra + AIG = Watch Your Wallet

Court Decision Will Lead to 10% Increase in Electric Bills for Most Missourians – Legislative Fix Necessary

Bad news today from the Western District Court of Appeals where a three judge panel ruled that a one-percent cap on rate hikes for renewable energy isn’t really a cap at all.

In 2008, Missouri voters passed Proposition C, the Renewable Energy Standard which created new mandates for investor-owned utilities to meet certain renewable energy targets, but which purportedly capped any increased rates that would result from the mandates to “a maximum average retail rate increase of one percent.” §393.1030.2(1). The proposition was pitched to voters with the promise that rates would never increase rates more than one percent. This limitation was included in the actual ballot language –restricting to no more than 1% any rate increase to consumers for this renewable energy?

Unfortunately, the Public Service Commission created rules implementing the initiative which ignored the one percent cap and instead allowed for up to an approximately 11 percent increase by interpreting the one percent cap to mean a one percent increase every year over a 10 year period. Cole County Circuit Judge Dan Green ruled in the spring of 2011 that the one percent cap really meant one percent, not eleven percent. The PSC appealed. 

Yesterday, the Western District ruled that the PSC’s interpretation of the statute was reasonable. In issuing its decision, the Court sidestepped the cap language, holding that the cap language included in §393.1030.2(1) “is a forward-looking planning analysis not designed to determine the actual rate impact on customers.” See Decision at 11. In a footnote, the Court better explains that the cap language is ambiguous, and, though it requires averaging, it does not specify “the time period over which the averaging occurs.” Id. at Footnote 3. The Court then rules that, given the ambiguity, the PSC’s interpretation of the statute is reasonable.

I disagree with that assessment. If one reads the statutory language in a vacuum, the decision would be reasonable. However, because this statute was passed through an initiative petition, I believe the actual language that appeared on ballots is highly relevant. That ballot language, as set forth above, clearly stated that there would be a cap of one percent, not a sliding cap which would eventually increase to approximately 11 percent. If the language had said rates could be raised 11 percent over 10 years, the initiative likely would have failed miserably. 

This case will likely be appealed to the Missouri Supreme Court. However, I believe a legislative fix is in order. Missourians did not vote for renewable energy that would cost them 11 percent in increased electric rates. They voted for renewable energy that would cost just one percent. I plan on sponsoring to take the caps back to the hard cap explained in the ballot language and supported by voters.

That said, Republicans who do not believe Missouri should set up its own health care exchange should read this opinion which illustrates the tremendous power of whichever administrative agency is charged with carrying out the provisions of statutes, rules, and regulations. The decisions explains that the decisions of administrative agencies are “presumed to be valid,” are “to be sustained unless…plainly inconsistent with the statute,” and that agencies have “broad discretion” in interpreting statutes, which applies to rules and regulations in well. In other words, the regulator nearly always wins. 

Disappointment on Small Nukes, But Hope Remains

The Missourinet reports on Missouri losing out on the first round of funding for small modular nuclear reactors. This is a disappointment, but the grants are not finished. As reported by the Post-Dispatch

But the Energy Department softened the blow for companies that weren’t chosen for grant money by simultaneously announcing plans to make additional funding available.

“The Obama administration continues to believe that low-carbon nuclear energy has an important role to play in America’s energy future,” Energy Secretary Steven Chu said in a statement. “Restarting the nation’s nuclear industry and advancing small modular reactor technologies will help create new jobs and export opportunities for American workers and businesses, and ensure we continue to take an all-of-the-above approach to American energy production.”

There will likely be a second round that could include the application filed for mid-Missouri.  

Endorsed by the NewsTribune

Pleased to report that the Jefferson City News Tribune endorsed my campaign for re-election this morning – as well as those of fellow Cole County Reps. Mike Bernskoetter and Jeannie Riddle. 

All have worked diligently and amassed admirable records, particularly with regard to the welfare of state employees, improving economic development and supporting expansion at the Callaway Nuclear Plant. 

Barnes was among the leading backers of a state employee pay raise of 2 percent, which exceeded the governor’s recommendation. 

As chairman of the House Committee on Government Oversight and Accountability, he has been instrumental in scrutinizing state tax credits, including investigating the state’s role in the failed Mamtek project.

He also has been a supporter of bringing small, modular nuclear reactors to the Callaway Nuclear Plant site…. 

Based on their accomplishments and efforts during their first terms, Barnes, Bernskoetter and Riddle deserve to be re-elected on Tuesday.

Progress Toward Mid-Mo’s Potential $1.2 Trillion Industry

Westinghouse announced a partnership yesterday with the University of Missouri at Columbia and Missouri S&T to “support the development of multiple cutting-edge research projects…that will benefit the Westinghouse Small Modular Reactor project and the nuclear energy industry as a whole.”

Westinghouse Vice President John Goosen said, “It is our hope that this alliance will underscore our efforts to support Missouri in becoming a hub for the design, development, manufacturing, construction, and deployment of American-made SMRs across this nation and around the world.”

Tim Wolfe, president of the University of Missouri System, said, “This is an important partnership for our university system, the state and nation as we look toward energy independence while at the same time bringing jobs to Missouri.”

SMRs have the potential to be a real “game-changer” for mid-Missouri’s economy. Yesterday’s announcement is one more step in the right direction.

A $1.2 Trillion Industry in Mid-Mo

The one and only Dave Drebes of MoScout lays out the math this morning for a new potential trillion dollar industry headquartered right here in Missouri. We’re talking about small modular nuclear reactors. Here’s the math: the reactors will sell for between $500 million to $2 billion. I’ve had folks tell me $1.1 billion is the target price point. (Drebes uses $1 billion per as his number.)

Around the world, there are 220 nuclear plants either being built or planned. Because SMRs are smaller, cheaper, safer, and would come off an assembly-line like process, they’re likely to be a viable replacement for many of those plants. To replace those 220 old-school nuke plants, there would need to be 1,100 small modular reactors built.

1,100 units times $1.1 billion per equals $1.2 trillion.

Now, there are still some big ifs in this equation. The first variable is the grant from the federal government. The second is convincing Westinghouse that, not only is mid-Missouri the place to do all the training and placement of the first reactors, it’s also the place to build the assembly line. We have some advantage in this regard. We have rail and river transport. We have an educated workforce. And we have Linn State, Lincoln University, and the University of Missouri nearby to train potential workers in all the different types of jobs that will be necessary.

There’s likely to be serious competition from other areas in Missouri along the Mississippi River. But I think it’s likely that Missouri will be the most likely place for manufacture given proximity to Callaway.

As I said last week in the paper, it’s as if the year is 1898 and Henry Ford has a little shop across the river. If Ameren and Westinghouse win this grant from the federal government for SMRs, it has the potential to set our local economy on an incredibly positive path. To give you another metaphor, the Missouri River Valley could be the Silicon Valley of SMRs.

ABC 17 Interview on Missouri’s Economy

ABC 17 reports on the recent numbers from the Commerce Department: Missouri ranks 43rd out of all 50 states for growth and the state’s gross domestic product was only up a fraction of percent. I made the story cut, arguing that the state of Missouri is doing economic development all wrong: 

“What we need to look at are broad-based reforms, tax reforms which encourage productivity,” Barnes said. Those reforms would include changes to education, infrastructure and energy. Barnes says the numbers don’t look good for continued, future recovery. 

Missouri’s GDP last year was 0.05 percent, well below the nationwide average of 1.5 percent. Only health care kept up with the rest of the country. 

Barnes says the governor’s administration has misplaced focus. “There’s a difference between a press opportunity and real job growth,” he said. 

Missouri government ought to forget the niche so-called jobs tax credits that have been proven not to actually add jobs to our economy. Instead, we should focus on improved higher education, technical training, new nuclear power development, and an improved Interstate highway system. 

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Huge Potential for New Nuke Development in Missouri

Sen. Mike Kehoe Supports New Nuclear Energy Development in Missouri

Great news from yesterday. Ameren and Westinghouse announced they’re teaming up to apply for $450 million in federal grants for modular nuclear development. Modular nuclear plants are smaller and “off-the-shelf,” reducing costs and allowing for a more steady build-up of power capacity than the construction of one huge plant.

What does it mean for Missouri?

If Ameren and Westinghouse win approval from the federal government, it means new nuclear development here for hundreds of millions less for Missouri ratepayers. And it moves the ball forward on ensuring secure affordable energy for decades to come.

Senate Passes American Energy Resolution

The Senate passed HCR 37 yesterday afternoon by a nearly unanimous vote. HCR 37 urges Congress and the President to support the development of North American energy. Canadian Mounties and North Dakotan landowners are much better business partners than despots from the Middle East or Venezuela. North American energy exploration and utilization improves our economy and makes the world a safer place. 

After the House passed the measure, President Obama sped to Cushing, Oklahoma to tell the world he would help streamline the permit process for the southern-half of the Keystone pipeline. Now that’s it passed nearly unanimously through the Senate, maybe the President will do the smart thing for our economy and allow the entire project to go forward.