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Missouri energy policy needs to balance economic, environmental interests, says Nixon

This article first appeared in the St. Louis Beacon, Sept. 17, 2010 - Gov. Jay Nixon emphasized the need to balance economic and environmental interests on Friday, as he laid out a plan for the state's energy future.

Nixon told a room of industrial consumers and energy executives at Washington University that the balancing act would need to include increases in environmentally friendly practices and clean, renewable energy sources while keeping energy costs affordable for consumers and businesses.

"Producers of power, consumers of power, big statewide utilities and small rural co-ops -- we all have a stake in Missouri's energy future and we need to figure out a way forward together that balances competing interests," Nixon said.

The governor's plan, though sparse on specific policy proposals, calls for increases in the use of renewable and clean-energy sources, improvements in energy efficiency and conservation practices, and more research into energy-related technologies.

He said investments in clean-coal technology and the "next generation" of nuclear power are attractive ways to shift the state's energy portfolio.

"Ameren's Callaway nuclear plant not only has proved to be safe, reliable and cost-effective to operate, but it also has improved its energy efficiency over the years," he said.

Nixon also touted conservation as the easiest and most inexpensive way to improve the state's energy use, citing his executive order last year requiring state government to reduce its energy use by 2 percent each year for the next 10 years. He said the state government cut its energy use by 6 percent in the first year alone.

Nixon also said the PACE Act, which he signed into law over the summer, would encourage more efficiency and conservation. He hopes the measure will help municipalities "establish Clean Energy Development Boards and issue bonds to finance residential, commercial and industrial energy efficiency and renewable energy improvements projects."

Nixon warned, however, that the state's transition to renewable energy would be much more difficult because of the need to maintain a stable energy supply for the state and keep costs affordable. "We've seen the terribly disruptive impact that unstable energy supplies have on our economy," he said.

Currently 83 percent of Missouri's electricity comes from coal -- a major reason Missouri's power costs are the seventh-lowest in the nation, Nixon said. But only a few percent comes from solar, wind, geothermal, hydroelectric and biomass. Shifting those numbers could take decades, he said.

"There is no silver bullet, no one source of energy that will meet all our needs for the indefinite future," Nixon said, characterizing himself as a "realist" when it comes to the state's energy future. "But I do believe that these percentages will shift. Not overnight, or even over the next decade."

Nixon said Missourians spoke loudly in 2008 in favor of using more renewable sources in passing Proposition C, which will require utilities to increase the proportion of electricity from renewable sources to 15 percent of the state's total energy use by 2020. He also said he would promote incentives to companies that bring renewable-energy jobs to the state.

And he also said the state could gradually tap into solar, hydroelectric, biomass and wind power --- but he added those sources still face issues of cost, reliability and integration into the state's power grid.

Nixon said research and development would be crucial in delivering technologies that boost energy efficiency, make renewable sources more affordable and reduce pollutants in fossil fuels. He expressed hope that energy research underway at University of Missouri-St. Louis, Washington University and other institutions in the state could bring about better biofuels.

"It's critical to Missouri's energy future that academia, industry and government maintain a strong, working partnership that is focused on innovation," he said.

Nixon was joined by Karen Harbert, president of the Institute for 21st Century Energy at the U.S. Chamber of Commerce. In separate remarks on the country's energy future, she praised the governor for emphasizing the need to diversify the state's energy portfolio.

"Your governor is an exception in that he understands this," Harbert said.

Harbert also lashed out at cap-and-trade proposals that Congress had considered, saying they would have drastically increased energy costs for Missourians and cost the state tens of thousands of jobs. Under "cap-and-trade," certain types of harmful energy emissions, such as greenhouse gases, are capped. Companies that pollute more can "trade'' emissions permits with other firms.

Harbert told the Beacon what she thought Missouri can do to achieve the energy goals Nixon outlined.

"For Missouri the question is going to be balance" rooted in the resource base here, "which is coal, natural gas and a little bit of nuclear," she said. "Moving forward that will need to be increasingly diverse. You will have probably some more renewables, maybe some more nuclear over time and some natural gas. It's a question of diversity, and it's also a question of investment because you're going to need more generation and more transmission here."

It's important, says Harbert, to make sure "you've got the fiscal environment and the regulatory environment so those investments can happen before they're needed -- because when they're needed you're already behind."

Puneet Kollipara, a student at Washington University, was an intern at the Beacon.