Utilities 101 — What Is RESRAM?
In 2008, Missouri voters approved a ballot initiative requiring a percentage of electric power generation to come from non-nuclear renewable energy sources. The new law also allowed electric utilities to recover certain costs associated with providing renewable energy through a surcharge on customers’ monthly bills.
Based on this law, the Missouri Public Service Commission (MoPSC) put a rule in place allowing certain renewable energy costs to pass directly onto your electric bill. This rule is referred to as the Renewable Energy Standard Rate Adjustment Mechanism (RESRAM).
RESRAM allows electric companies to adjust rates outside of a traditional electric rate case to recover certain costs associated with renewable energy generation, such as wind and solar power. Electric utilities must generate or purchase electricity from renewable sources equal to at least 15% of their total electricity sales.
In 2024, the RESRAM surcharge for customers of Ameren increased from approximately $0.35 per month to about $2.04 per month. While this may seem like a small amount on an individual bill, such increases generate millions of dollars in additional revenue for electric utilities.
SB838: Expands RESRAM to Include Nuclear Energy
State Senator Mike Cierpiot is sponsoring Senate Bill 838. Key provisions of this bill include:
- Redefining renewable energy to include nuclear power;
- Lowering the renewable portfolio requirement from 15% to 7.5%;
- Allowing utilities to meet the requirement by purchasing nuclear energy credits.
Why We Are Concerned:
1. SB 838 would effectively overturn the will of the voters by redefining “renewable energy” to include nuclear power.
During a Senate Commerce, Consumer Protection, Energy, and the Environment Committee hearing, Senator Cierpiot acknowledged that nuclear energy “probably isn’t renewable,” but argued it should qualify as clean energy. However, when Missouri voters approved the Renewable Energy Standard in 2008, nuclear power was explicitly excluded. Lawmakers at the time recognized that if nuclear energy were included, utilities could satisfy the entire renewable energy requirement without investing in sources such as solar or wind power.
2. Potential for Higher Utility Bills
Unlike traditional utility rate cases before the Missouri Public Service Commission, RESRAM adjustments occur without the full regulatory scrutiny that typically evaluates whether costs are just and reasonable. Expanding the definition of renewable energy could allow utilities to recover nuclear-related costs through RESRAM surcharges. This could allow significant costs to be passed on to customers.
Traditional rate cases require utilities to justify their expenses in a comprehensive regulatory review. RESRAM, however, allows single-issue surcharges that bypass many of those safeguards. Over time, reliance on surcharges instead of full rate cases can erode the discipline of traditional ratemaking.
But the biggest threat is what would happen if SB 838 allows monopoly utilities to pass the costs of an entire nuclear power plant through the RESRAM surcharge. What is now a mere $2.04 per month charge would explode, further exacerbating the monthly bill impact from a nuclear power plant project on consumers. We believe that if a nuclear power plant does need to be built, that it should be paid without RESRAM (and without CWIP).
3. Senator Cierpiot’s Legislative Track Record
We watch legislation sponsored by Mike Cierpiot very closely. In recent years, he has advanced bills such as securitization legislation (backed by Evergy Power PAC) and Senate Bill 4 (supported by more than 90 utility lobbyists). These measures increased utility profits while shifting more costs onto Missouri electric customers.
Recommendation:
Because SB 838 redefines renewable energy, weakens a voter-approved initiative, and could increase utility costs for customers, we recommend a NO vote on SB 838.
Click here to find your state legislator; ask them to oppose SB 838.
