St. Louis Post-Dispatch: State energy experts examine options to improve grid, utility financing
There’s a joke among energy experts that electrical infrastructure is so outdated Thomas Edison would know his way around a modern-day substation.
Problem is, it might be true.
Across Missouri — and, indeed, around the country — electrical utilities are grappling with ways to modernize the grid, much of which is showing its age.
“Some substations will be 90 years old when they’re replaced,” says Tom Byrne, Ameren Missouri’s senior director of regulatory affairs, if the current pace of replacement continues. Underground electrical infrastructure in downtown St. Louis, he said, may even reach 100 years in age by the time it’s updated with modern technology.
The challenge, as Byrne will tell you, is how to pay for those improvements in a timely manner. As state-regulated monopolies, utilities must seek approval for the rate increases needed for infrastructure and other costs. In Missouri, however, the regulatory approval process can make it years from the time a project is completed until its costs are recovered.
That delay is called regulatory lag, and it was one of the main topics of discussion in Jefferson City on Tuesday, when utility insiders, regulators and other experts came together at a meeting hosted by the state Public Service Commission to assess what policy levers can be adjusted to improve Missouri’s energy landscape.
Negative load growth
Utility representatives described the difficulties of funding improvements in their industry — a problem that they say has been compounded by declining revenue from their customer base, as technologies such as energy-efficient appliances and rooftop solar panels have helped reduce overall electrical demand, or load.
“We can’t rely on load growth to pay for new facilities,” said Byrne. He said Ameren has experienced negative load growth in each of the last nine years, not including usage by Noranda Aluminum, formerly the state’s largest energy consumer, which closed its New Madrid smelter earlier this year.
