Avery Frank, Elias Tsapelas, and David Stokes join Zach Lawhorn to break down the final week of the 2026 Missouri legislative session. They discuss the constitutional amendment heading to voters that would begin the process of eliminating Missouri’s state income tax, where property tax reform efforts stand heading into the final days, the early literacy bill’s uncertain path through the Senate, the legislature’s approach to A through F school report cards, what the state budget does and does not get right, the Ferguson city council’s rejection of a major data center tax subsidy, and more.

Listen on Spotify

Listen on Apple Podcasts 

Listen on SoundCloud

Episode Transcript

Zach Lawhorn (00:00): Welcome to the Show-Me Institute podcast. I’m Zach Lawhorn from Show-Me Opportunity. Today I’m joined by Avery Frank, Elias Tsapelas, and David Stokes from the Show-Me Institute. It is the last week of the 2026 Missouri legislative session. Today we’re going to go through what has crossed the finish line, mostly what has not crossed the finish line, and see what these guys think about the possibility of that happening here in the home stretch. Elias, we’ll begin with something that has crossed the finish line, and that is the start of a discussion about phasing out Missouri’s state income tax. Legislation did pass. It goes to the governor, and he gets to decide when it goes on the ballot. So what do we know right now, what passed, and what are Missouri voters going to be asked sometime in the fall?

Elias Tsapelas (00:50): By May 22nd, the governor needs to decide whether this constitutional amendment will go on the August or November ballot. What it says, essentially, is to Missouri voters: do you want to start the process of getting rid of Missouri’s income tax? It comes with three main components. The first piece is the legislature will be required to enact legislation that would get rid of the state’s income tax based on revenue growth. Once that income tax is gone, it cannot be reinstituted. Previous versions of this bill had some details lined out about how the income tax rate would be cut based on revenue growth, but in later versions this was stripped back to just the legislature will decide this later. The other two pieces say you will also be authorizing the legislature to expand the state sales tax base, meaning the things the state sales tax applies to. This could also involve changing the rate, because right now Missouri’s constitution does not allow the state legislature to expand the sales tax to anything that was not taxed in 2015. But this does come with a guardrail: if the legislature does change the state sales tax, it has to be done in a revenue neutral fashion. So expanding the sales tax base or raising the rate to bring in additional tax revenues has to go towards lowering the state income tax. That gives the legislature the authority to change how much revenue comes in, which would speed up the process for getting rid of the income tax. The last piece is a component for local governments. If the state changes the number of things that the sales tax applies to, this would also increase revenues to local governments. Those additional revenues would have to go towards a list of other taxes that would be lowered. In places like St. Louis and Kansas City, that would go towards lowering the earnings tax. For other local governments, they get to choose whether it goes towards lowering the sales tax, property tax, personal property taxes, or real property taxes. The key piece being revenue neutral. This is not going to be a windfall for anyone. It is basically the start of a discussion, because they don’t say what the rate might need to go to, what the sales tax could be expanded to, or what revenues would trigger income tax elimination or cuts. This is just the start of the discussion, giving the legislature the authority to keep moving in the direction we started around 2014.

Zach Lawhorn (03:57): Taking those a piece at a time: the first one, if it passes and the income tax is eliminated at some point, it cannot come back. That seems pretty straightforward. The next two seem like responses to opposition that we hear on a regular basis. The first being the revenue triggers, which seem designed to prevent what we often hear about with Kansas, where they cut the income tax without cutting spending, leading to revenue shortfalls. And the expansion of the sales tax base seems like protection against having to raise the sales tax rate on goods. Do I have that right?

Elias Tsapelas (04:40): Yes. The revenue trigger piece is basically what Missouri has been doing for a while, waiting to see how much revenue we have before lowering the income tax by that amount. We’ve been doing that for over a decade now and have lowered the top individual income tax rate from 6% to 4.7%. We’re just continuing down that path to be sure we don’t create some enormous budget hole. Now, when you look at the sales tax, Missouri has a very complicated, out-of-date sales tax system. The state sales tax rate is 4.225%, but when you go to the store you’re paying something significantly higher, largely due to local governments and a lot of special taxing districts. Missouri also has a lot of sales tax exemptions. Missouri really needs a full look at its entire sales tax system. But economically, when thinking about switching a state from being primarily funded by income taxes to something closer to sales taxes, the best way to fund a state is to tax as broad a base as possible so you can have the lowest rate possible. You want to be taxing final consumption, not business inputs. As we start the idea of transferring to more of a consumption tax in Missouri, the goal is to make sure it doesn’t become a tax increase for some people while things change elsewhere. It’s trying to keep it level the whole way, and at least right now it seems like a pretty neutral proposal going forward.

Zach Lawhorn (06:24): David, for people who don’t think about taxes as a corresponding tax system, can you explain the idea of local governments rolling back certain taxes and how people might experience that on their property tax bills or personal property tax bills?

David Stokes (06:44): It’s trickier than you might think, but it’s vital that it be done right. If you expand the sales tax base at the state level, as Elias discussed, you don’t want local governments to start collecting significantly more sales tax revenue for no reason. At the state level we’ll do something good with that and phase out the income tax, but at the local government level we don’t want just more revenue with nothing to spend it on. You need tax relief for citizens, which is why they’re going to require rollbacks. They’ve given local governments some options in how you roll that rate back, which is a good thing, but they need to give them a few more options. For example, they said you could roll back property taxes, real property taxes, personal property taxes, or sales taxes. A few things that need to be considered: many municipalities don’t have a property tax, so they won’t be able to roll back the property tax. And it’s trickier to roll back sales taxes than you might think. Unlike property taxes and income taxes, which can be reduced in small increments, sales taxes have to be done in set increments. You can’t go from a 1% sales tax to a 0.92% sales tax. It’s just not allowed and would be incredibly difficult for retailers to implement. So local governments need even more flexibility in how they roll back taxes. I would say the utility tax, which just about every county imposes, is a great option to add to the choice mix for rollbacks. These are the sales taxes that can be placed on utilities, which unlike other sales taxes can be rolled back in small increments. That’s a very good option. The biggest challenge of all, though, is the special taxing districts that Elias mentioned earlier, such as transportation development districts and community improvement districts. These usually only have sales taxes and nothing else. You have to address what they do if their sales tax collections go up 30% and they have no legal way to roll it back by that same amount. So we need to adjust that. I would also hope that part of this whole deal would be a substantial cap on how these special taxing districts like TDDs and CIDs operate in the first place, to really restrict their continued expansion in Missouri, which has been very harmful. Those are just a few ideas out of many in how local governments are going to have to address this.

Zach Lawhorn (09:59): Finally, Elias, as you said, it’ll be on the ballot sometime in the fall. But between now and either August or November, people interested in this topic are going to see a lot of data, modeling, estimates, and projections. We want to be honest about what we can know and what we cannot know. With the legislation that has passed now, what should people keep in mind when they see some of these estimates or models or projections this summer?

Elias Tsapelas (10:39): The first thing is, if you see anything claiming this is going to generate a tremendous budget shortfall or major harm to local governments, this thing is set up to be revenue neutral. This is not something that is going to create enormous holes. Most of the time, estimates that reach that conclusion assume this would work in an entirely different way than what is allowed. So that is something you don’t necessarily need to worry about. What people are more reasonably worried about is: if you empower the legislature to expand or raise the sales tax, how is that going to impact everyone? Missouri’s state and local combined sales tax rates are relatively high already. The state’s portion is pretty low, but combined it’s relatively high. So what the state decides to do in terms of how much it expands the sales tax base, whether that involves more services versus goods, will impact different people differently, in different parts of the state and at different income levels. Anything right now that says this is definitely going to be bad for X person, we just can’t know that, because there’s not enough information out there. Everyone should keep an open mind and also recognize that the reason for this amendment and this proposal is that Missouri’s economy is falling behind. We are falling behind our neighbors in terms of tax competitiveness, and the only way to change that is to improve Missouri’s tax standing. Our sales tax system is incredibly broken, so this is something that is going to need to be fixed. At least right now we are at the point of asking: do we want to go down this path? Let’s hope the legislature does a good job. We’ll be shining a light on whatever they do, but we can’t know some of the things that people are warning about right now.

Zach Lawhorn (12:50): David, after the legislature got the income tax bills out the door, they shifted to talking about property taxes, which is something we hear a lot about. People want property tax reform. With only a few days left in the session, where do those efforts stand and what are your thoughts?

David Stokes (13:11): Unlike a lot of the property tax changes of the past few years, I actually like the property tax changes being proposed this year. At least one property tax bill is in conference committee being debated between the House and Senate right now. Another major bill has passed out of the Senate but hasn’t made it through the House yet. I’m told there are going to have to be some compromises on both sides to get a bill across the finish line, and there’s nothing wrong with that. The biggest change this year, which seems very much in the weeds but is significant, would take the way property taxes are imposed in St. Louis County and apply it to the rest of the state. St. Louis County has different tax rates for all the different types of property: residential, agricultural, commercial, and personal property, which includes your car, boat, farm equipment, livestock, and the like. Those rates adjust differently as assessments go up and down each year. This approach was originally intended to be extended to the rest of the state about 20 years ago when they did it in St. Louis County, but the following year they came back and said the rest of the state didn’t have to do it. It’s a good idea. It might sound strange to some people, but a good example of why it would be beneficial came from stories in the St. Louis Business Journal about the real decline in commercial property values in the city of St. Louis over the past year. Because they set one tax rate measured under one unified property value, residential homeowners in St. Louis end up making up with their taxes for the decline in commercial property. In St. Louis County, with the siloed tax rates, if commercial property goes down, the commercial property tax rate will go up to offset that instead of passing it on to homeowners. In rural Missouri, which has so much agricultural property, this would allow agricultural property tax rates to increase to fund goods in rural areas without as dramatically impacting commercial and residential property. I think this is a good idea and I hope it passes. There are also some good amendments that would put taxpayer protections in place to avoid the temptation of local officials to target commercial property with these new different tax rates. It’s in the weeds, but I think these are good changes this year.

Zach Lawhorn (16:24): That sounds like the other side of the coin from what’s happened in Jackson County, where over the last few years people have been very upset that their assessments have gone up by more than 20% and residential homeowners have seen gigantic leaps in their property taxes. Is this kind of like having to turn one knob one way and another knob the other way?

David Stokes (16:55): Sort of. The tricky part is that the situation in Jackson County for the past 10 years has been so bad, it’s hard to compare it to other counties. It’s been uniquely horrible for the people of Jackson County. But it does start with one basic truth: 15 to 20 years ago, Jackson County was under-assessed. The assessor was ordered to increase the valuations because they were improperly low, and probably artificially and intentionally low. The right approach would have been to raise those assessed valuations to more accurate totals while lowering the rates at the same time to avoid crushing people with higher taxes. But Jackson County’s taxing entities have not really done that, starting with the Kansas City 33 school district, a very large school district in Kansas City, which is the only taxing body in Missouri exempt from rolling back rates as values increase. So you’ve seen these giant increases within that school district and they don’t even have to roll back rates. They just get to keep their same rates, as they have frequently over the past 10 years. So people are getting walloped. And then you throw in the fact that the Kansas City Assessor’s Office has done a terrible job managing the process year after year, not hitting deadlines for notifying people about changes and not properly running the appeals process. It’s just been a terrible system in Jackson County, and almost uniquely so.

Zach Lawhorn (18:30): All right. Before we have Elias read the budget line by line, Avery, I want to get an update on the education items here in the last week of the session. Early literacy, the reading bill, we’ve been talking about it all session long. How’s it looking?

Avery Frank (18:47): When it first passed out of the House before spring break, 131 to 10, I was genuinely excited. It wasn’t necessarily that it passed so early; it was that it passed with such little resistance and such bipartisan support on both sides of the aisle. Teaching our students how to read, giving every student the best chance to become a confident, capable reader, that seems like common sense and a goal that everyone wants to work toward to help our state improve and perhaps become the next Mississippi. It looked that way before spring break, but the Senate version of the early literacy bill got filibustered and set aside. The House bill has made it through the process and is on the informal calendar for third reading, so it could be taken up at any time. If it does pass the Senate, I anticipate it would easily pass the House again. But that is the problem with a lot of education legislation: can it pass the Senate? There have been different concerns about the early literacy bills. Some people are concerned that the MAP test, or the Missouri Assessment Program, which we use to test all of our students, is not a good measure and we shouldn’t be basing anything on it. Some are concerned with third-grade retention and whether it actually helps, looking at states like Mississippi and noting that while fourth-grade scores are great, eighth-grade scores have only improved a little. Those are the main pushbacks we’re seeing. I would still say this is something we really need to do. The early literacy bill is built on two different pillars. The first is a mandatory third-grade retention policy. Missouri already tests all K through third-grade students with a reading screener to see how they’re doing with reading. What this bill would do is set a passing score for those screeners. If students don’t meet that score, they would be retained in third grade, because reading is such a foundational skill. If you don’t know how to read, that’s something worth holding back for, to make sure students get it down before moving on for the rest of their educational career. Students would still have the opportunity to retake the screener, and there would be good-cause exemptions for students with disabilities, for students who have been held back previously, and for English language learners. The second main pillar is reforming our teacher preparation programs. In 2023, the National Council on Teacher Quality conducted a survey of all of our universities and teacher preparation programs and found that half of them received an F in teaching the science of reading, which is the best evidence-based way to teach students to read. The early literacy bill would align our teacher prep programs with those best practices. If they don’t do it, they can’t certify teachers. You can see how there could be pushback and reason why people would filibuster or not want it to come to the floor. That’s where it stands right now. I’m hoping people set aside their objections and recognize that this is a great first step to get Missouri back on track. Our reading scores have been really poor, especially after the pandemic. They continue to decrease and have not bounced back at all. They’re lower now than they were the first year after the pandemic, and we have to turn things around. These early literacy bills, I hope people see the common sense in them.

Zach Lawhorn (22:30): It’s not even the perfect being the enemy of the good. It’s just people being afraid to push back against the status quo. Missouri has fallen back in reading test scores, and other states, most notably Mississippi, have found ways to improve. I don’t think it’s helpful to frame this as some kind of radical moonshot. In the final days of the session, the urgency cannot be overstated. The other thing we’ve talked about a lot this session is A through F report cards, a transparency measure. Governor Kehoe issued an executive order before the session started. What’s the status of the legislature trying to adhere to the governor’s executive order?

Avery Frank (23:19): The legislature has tried to legislate its own way into how the executive order gets implemented, because DESE, the Department of Elementary and Secondary Education, could implement it in their own way. The legislature wants to determine how things are going to be scored instead of letting DESE make that decision. There’s been a lot of back and forth, and a lot of different interested parties. Not to get too in the weeds, but some districts really want academic achievement, their base score on the Missouri Assessment Program, to be weighed the most heavily because that would give them the highest score. Some want growth to be weighed the most heavily for the same reason. Some want basically no grades and a lot more qualitative information. There are a lot of different factors. The best vehicle for A through F report cards right now looks like Senate Bill 1351, which continues the long legacy of education omnibus bills used in recent years in Missouri. It combines the report card, limits on screen time for young students, and a couple of other things. I’m not sure if that’s going to make it past, to be honest. People are still concerned about whether the Missouri Assessment Program is something they want to base all of this on. Personally, I think the executive order is better than the legislation as it currently stands. They got rid of one aspect I liked as a researcher: in Governor Kehoe’s executive order, there was a penalty if districts didn’t report their data properly. In the current legislation, Senate Bill 1351, if districts don’t report sufficient data, it’s just written as an aside, basically saying they have to note on their report card that there is not sufficient data, and then they’re not included in the ranking as much. I don’t like that. It gives districts, especially poorly performing ones, an incentive not to report their data so they can have this qualifier on all of their report cards. I also don’t like it because, from all the education research I’ve been doing, we really do have a data reporting problem and we need to be a lot better about transparency. I hope we get some good report cards, because right now at the Show-Me Institute we do our best with the data we have, but we have to work with unsuppressed data, meaning we don’t have data that could potentially identify certain students. So there are some districts we have no data on because they’re so small. But DESE and the state have the best data possible. They could make a really good report card even better than we could, because they have better data than we do. That’s why I’m really hoping we get a good report card, because it would be very helpful for all the parents, legislators, and researchers across the state to see which districts are doing well and learn from them, and which ones are doing poorly and need more support.

Zach Lawhorn (26:42): Let’s talk about the budget. Elias, the legislature passed the budget a little early this year. They beat the deadline by a couple of days, right?

Elias Tsapelas (26:53): They finished early, which is a little bit different than the last few years.

Zach Lawhorn (26:56): Are we spending more or less money than last year?

Elias Tsapelas (27:01): Spending less, but I’m not throwing them a party. There’s just a lot less federal money going around. There was a lot of COVID money in recent years, and Missouri hasn’t spent all of it. The current budget this year is about $54 billion. What the legislature passed is a little bit less than $50 billion, depending on whether you count different construction items. But there was a lot of federal money in that total. At the end of the day, what we’re looking at is a budget that is still going to spend more general revenue, where our income and sales tax dollars go. It’s still going to spend more than we expect to bring in. So we’re still going to exhaust all of our surplus that we built up over those years. There were some positive things that happened this year, but ultimately part of how they got the budget done early was by spending just a little bit more, so they left some of the good on the table.

Zach Lawhorn (28:20): So we’re spending the surplus, as you’ve been warning about for several years, the federal money is drying up, and to circle back to the opening segment, I think part of the trust the legislature is going to have to build this summer is demonstrating we’re getting spending under control. You said you’re not throwing them a party. But is this reduction, whatever the reason, directionally good enough for the legislature to say they’re working on the spending side of things, or is it just not good enough?

Elias Tsapelas (29:00): I think I’ll know a lot more going into next year, because there were a lot better discussions this year, especially looking at spending incentives. As was mentioned, DESE is going to have a new funding formula, or at least the governor has a task force working on one. The way education is funded for K through 12 is going to change. There was also a big fight this year about how to fund higher education. What seemed to me like a common sense idea, essentially having the legislature fund colleges based on how many students are enrolled, turned out to be considered too radical and was pushed off for the future. But there’s talk of coming back with a performance funding measure going forward. There’s also some movement on changing how the state does its IT work. There are a lot of IT changes coming, including things affecting Medicaid and the Supplemental Nutrition Assistance Program. Missouri has a very bad track record with IT. Part of this budget moves some IT resources over to the Department of Social Services to support getting things going there, because most IT for the state of Missouri is currently consolidated in the Office of Administration. While that can seem efficient because every state department doesn’t need its own IT department, it also makes it a lot harder to hold people accountable. There has been a big issue recently with the state’s accounting software, where a contract is millions of dollars behind schedule and not working. The budget tries to get at that too, and it raises this major incentive question: are the people in charge of implementing new IT going to do their best at something that will ultimately try to eliminate their job? I think the legislature is finally starting to deal with that. Ultimately, if we go down the path of a more efficient government and a better tax system, that may mean fewer state employees, and that is something that hasn’t come up much but I think the legislature is finally starting to look at. Pushing toward better funding models, a better state workforce, all those type of things, is moving in the right direction as opposed to how it has been, where the budget just grows larger every year. They’re looking in the right direction. I would have liked to see more, but I think we’ll know a lot more in the next year, especially because the federal COVID funding will essentially be gone.

Zach Lawhorn (32:12): Our final topic, partly so we can put it in the title of the episode for clicks, but also because it seems like every week there’s a story from across the country or across the state about data centers and communities pushing back for a lot of reasons. The most recent one was Ferguson in the St. Louis area. David, can you catch us up on what was on the table for this data center in Ferguson and what happened?

David Stokes (32:40): The vote that the Ferguson city council took last week was strictly on a tax subsidy, I believe about $1.8 billion in tax abatements and various subsidies for the project. It was not a vote on approving the data center itself. This was a commercially zoned area, so it didn’t need any permission to put a data center there, and that’s a good thing. But the city nonetheless rejected the tax subsidy, which I thought was the right call. These data centers are very profitable and important, and I’m certainly not anti-data center. But the demand that they get enormous subsidies everywhere they seem to be going is improper. Festus was right to approve the data center operation there, but I think very much wrong to approve the enormous tax subsidy the city granted, which I believe was about a half a billion dollars. Avery can correct me if I’m wrong on that exact number. I like what Ferguson did, and I hope the data center moves into the old Emerson complex there nonetheless. We need data centers. Data centers produce so much tax revenue that they can generate their own tax cuts, and I don’t mean a special subsidy for the data center itself. I mean they go into a city or a small area, generate so much revenue, and you can cut taxes for everybody in that community, including the data center itself. I think that’s the road to follow, and hopefully that’s what we’ll have in Missouri. I also think we need to change the way data centers are taxed in an upcoming legislative session, taxing them a little more like utilities to reduce the incentive for one city or county to hand out a big subsidy and instead spread those tax benefits around a little more.

Zach Lawhorn (34:46): Avery, are you heartened by this rejection? Because as David said, we need the data centers, but we really want to avoid this new layer of corporate welfare that could pop up everywhere. So how do you feel about it?

Avery Frank (35:00): I’m actually very excited by the rejection in Ferguson. I’ve talked to a lot of people on both sides of the data center debate, those who have gone to the meetings and stayed up until 3 a.m. and protested, and those who want them. When I look at this Ferguson project specifically, the numbers David was talking about involved granting up to 15 years of tax abatements on real estate, personal property, and sales tax for a data center project. When I see something like that, it gets at what David was talking about. The only true significant benefit of a data center is the tax revenue it could bring. It doesn’t bring a lot of jobs. It takes a lot of electricity and a lot of water. It generates noise. It already makes a lot of people upset, and there are concerns about housing values and everything else. So if you’re not getting any tax revenue, there really is no strong incentive to have a data center project. That Emerson complex in Ferguson had thousands of employees. A data center does not take very many employees at all. So when you have people coming up and saying this data center project won’t succeed unless we get all these tax subsidies, I say that’s fine and I hope you don’t build a data center there, because the tax revenue is really the only benefit you’re getting from it. One of the bigger things is just something about Missouri in general. I’m from Tennessee and there are a lot of concerns there about having too much growth. Missouri sometimes feels like the opposite of Tennessee. We’re so desperate for growth that we’re willing to hand out a bunch of money. We don’t have enough pride. This Emerson complex is a good building and a good place. Ferguson has a STEM high school that produces very high test scores and graduates people who can work in the tech industry or an engineering industry. We shouldn’t waste a good building and a good workforce on a project that’s going to get all these tax subsidies and not bring a lot of jobs. The same thing happened over in Independence, where they gave out billions in subsidies for a data center project. Whenever I see that, I think we have to have a little bit of pride in Missouri. We can’t just be giving out all this money to get anyone to come. We have a good parcel of land, a good workforce, a lot of water, and a central location in the country. We can attract good projects, data centers or not, without giving out a bunch of subsidies. We need to understand what the benefits and costs of a data center are and what data center developers are actually looking for. They have a lot of money already. If you give them a good workforce, a place to build, and community support, I think they’ll come, even without a bunch of money.

Elias Tsapelas (38:28): I was really hoping this was the discussion we were going to have this year in Missouri’s legislature, because it started off so well with the discussion of how to get rid of the income tax and everything that goes with that. Talking about the income tax is really about how you make your state more desirable and how you grow faster. But Missouri for so long has just said: we want this industry or this type of business, so let’s give it an economic development tax credit. Let’s give out a billion dollars worth of those. Let’s give out sales tax exemptions. As far as I know, data centers in Missouri already get state and local sales tax exemptions. We just give those out. If we’re really going to start thinking about how to make the state the most desirable place, how to grow the fastest and be the most desirable for families and businesses, that’s really more about making the tax climate the best for everyone, not constantly picking winners and losers. Unfortunately, the budget didn’t see as many cuts as I had hoped. As we go into the last few days of the legislature, there are plenty of tax credit bills waiting to pass. The film tax credit is back and there’s talk of extending the sunset on it. There are other tax credits. We’re still going down that path. There are still more sales tax exemptions being considered. Missouri just needs to decide what direction we want to go, because ultimately if we do get rid of the income tax, a lot of these economic development incentives don’t even really work anymore. You have to look at different things. You have to look at what is really the criteria for families and businesses. States across the country are dealing with these issues, changing their economic conditions, their tax policy, and people are moving there. We know people are leaving Missouri. We know income is leaving Missouri. We need to change things. The status quo is not going to work going forward, and I was hoping that would have sunk in a little bit more this year than it did.

Zach Lawhorn (40:37): We will leave it there this week. We’ll talk to everyone again after the session ends over the next few days and see how everything turned out. As always, plenty more at showmeinstitute.org. David, Avery, and Elias, thank you very much.

The post Missouri’s 2026 Legislative Session Final Week appeared first on Show-Me Institute.

Last year, the passage of Senate Bill (SB) 4 allowed natural gas plants to raise rates to pay for construction before plants are put into operation, a process known as construction works in progress (CWIP). Companies using CWIP under SB 4 would still be subject to cost caps (by estimated cost and completion date) and a refund mechanism (with interest) if the project is not finished. There was speculation about whether a provision in SB 4 would also allow its usage for nuclear projects.

A recent change to SB 838 would remove any ambiguity; the change explicitly prohibits nuclear energy projects from using CWIP.

But is preventing nuclear projects from being able to use CWIP really a good idea?

Some view CWIP as necessary for new nuclear projects to get a foothold in Missouri. Excluding nuclear from this flexible financing method could either drive up total costs (since loans would bear interest) or even eliminate potential projects altogether.

At the same time, the concerns surrounding CWIP are real and should not be dismissed. Charging ratepayers before a plant is operational raises difficult questions. Should utilities earn a return before delivering a service? Does this reduce incentives to control costs during construction? And what happens if a large, high-risk nuclear project is cancelled (which has happened in the United States before)?

These are not trivial concerns. However, a better solution for Missouri would be to improve the CWIP framework for all energy sources.

SB 4 already includes cost caps and refund provisions, but additional safeguards could further protect ratepayers while still allowing needed infrastructure to be built.

Virginia recently passed CWIP reform, and it instituted additional safeguards that Missouri could also adopt:

• Excluding 20% of development costs from CWIP eligibility
• Mandatory evaluation of federal funding opportunities from the Department of Energy
• Establishing a cap on residential monthly bill increases ($1.40 per 1000 kWh)

Additionally, the Missouri Public Service Commission could evaluate compensating ratepayers appropriately for early contributions and their role in risk-sharing, such as treating CWIP financing more like a bond system.

These improvements could even better protect and reward ratepayers, as well as facilitate needed power plant construction without targeting a specific technology—an effective compromise.

The post Nuclear Energy and Construction Works in Progress (CWIP) appeared first on Show-Me Institute.

A version of the following commentary appeared in the Columbia Missourian.

Missouri, like many states, mandates that a certain share of electricity come from renewable energy sources. Those sources typically include solar, wind, and biomass—but in many states, including Missouri, they exclude nuclear energy.

A productive debate could be had about whether state government should issue any such mandates. But in the meantime, legislators in Jefferson City have introduced several bills using different approaches, each of which would broaden Missouri’s existing standard to include nuclear energy.

Governor Kehoe discussed the issue in his recent State of the State Address, recognizing the long-standing mismatch between policy and reality.

What Is Missouri’s Current Policy?

Missouri’s current renewable portfolio standard (RPS) mandates that no less than 15 percent of each electric utility’s sales come from generated or purchased renewable energy resources (such as solar, wind, biomass, small hydropower, and other non-nuclear sources certified by the state as a renewable). Many other states have adopted similar standards.

Justifications for RPSs vary. Some view them primarily as a tool to improve air quality or limit greenhouse gases. Others argue that portfolio standards help newer energy technologies compete with established fossil fuels or ensure a diverse and resilient mix of energy sources. In any case, if Missouri is going to have an RPS, nuclear energy should be included.

Is Nuclear Energy Clean?

If Missouri’s RPS exists in order to protect the environment, nuclear energy’s exclusion is unreasonable.

Nuclear energy is a zero (or near-zero) emissions energy source, in terms of both criteria pollutants (those that affect air quality) and greenhouse gases.

Further, to produce the same level of electricity, solar farms need 31 times more land than nuclear plants, while onshore wind farms need 173 times more land. In terms of total direct and indirect land use, nuclear is by far the most efficient.

What About Nuclear Waste?

This concern is common but often misguided. Nuclear energy does produce waste, but the waste is compact, carefully managed, and tightly regulated. Much of what is labeled “waste” still contains usable energy. In fact, only about four percent of nuclear fuel is truly unusable after each use, and the United States could reduce nuclear waste in terms of both volume and radioactivity if the industry recycled used fuel. While existing American nuclear power plants are not well equipped to use spent fuel, new advanced reactor designs are increasingly capable of using it to generate electricity.

Regardless, the presence of safely stored waste should not prevent nuclear energy from being included in an updated portfolio.

Government Interference in the Energy Market

Past arguments have held that subsidies level the playing field for renewable energy. Yet, while solar and wind have expanded rapidly in recent years, only seven nuclear plants have been constructed in the U.S. since 1990. Factors such as regulatory burden have also contributed to nuclear energy’s stagnation, but government interference has played a role. Subsidies, tax-credits, and mandates have actually significantly distorted the market in favor of renewables.

The lion’s share of the more than $80 billion in federal support for renewables came through tax expenditures—driven overwhelmingly by the investment tax credit (ITC) for solar projects, which is claimed when a project begins operation, and the production tax credit (PTC) for wind generation. State RPSs create guaranteed demand for these resources, while federal tax policy lowers the cost of supplying them—effectively a double incentive.

This is not to argue that nuclear energy should be subsidized to a similar degree. However, including nuclear energy in Missouri’s RPS would at least make existing policy more even-handed. Nuclear energy meets growing electricity demand cleanly and reliably. The Missouri Legislature should update the state’s RPS to recognize this fact.

The post Missouri Should Update Its Renewable Portfolio Standard to Include Nuclear Energy appeared first on Show-Me Institute.

Last legislative session, Missouri lawmakers took a swing at addressing anxiety over data centers increasing electricity rates with the passage of Senate Bill (SB) 4. This bill requires that customers with loads over 100 megawatts (MW) pay their share of costs associated with connecting to the regulated grid (the Missouri Public Service Commissions recently expanded that rule to 75 MW). For reference, 100 MW is roughly equivalent to the electricity needs of 80,000 U.S. households.

There has been confusion about whether average Missourians’ rates would increase due to data centers. It’s understandable that people might be confused about some language in the bill. For example, what exactly does “any unjust or unreasonable costs arising from the service to such customers” or “pay their share of costs” mean?

A recent hearing at a St. Louis Board of Alderman committee meeting brought some needed clarity to the matter. When questioned, Ameren’s manager of economic development clarified that “all Ameren customers, including residential customers, pay for expanding the grid through building new power plants through rate increases, and that may be needed to accommodate large-load customers.”

In plainer English, average Missouri ratepayers would pay for new power plants constructed to meet data center demand—which could be a hefty bill if Missouri does indeed need new power plants.

Major technology companies (Amazon, Google, Meta, Microsoft, xAI, Oracle, and Open AI) are meeting with President Trump to sign a pledge that they will supply and pay for their own power for artificial intelligence data centers.

So average Missourians won’t be paying for new data centers at all?

Potentially, but it depends on the deal that is finalized with the major tech companies.

While there is some uncertainty about who will pay for what, Missouri could bring clarity by allowing consumer-regulated electricity (CRE).

CRE offers a private, parallel pathway to energy abundance, and gives data centers a private partner (CRE utility) to meet their own energy needs with less red tape, more certainty, more control, and more freedom to innovate. A CRE utility would develop and operate generation on behalf of large-load customers that prefer not to own and operate power plants themselves.

SB 4 was a good start, but Missouri can go further in protecting ratepayers and attracting investment. Allowing CRE could create a clear, structural pathway that could not only further protect ratepayers, but also provide attractive, tangible benefits to the developers paying for their own energy needs.

The post Who’s Paying for What with Data Centers? appeared first on Show-Me Institute.

As a writer, there are moments when someone else articulates an idea so well that rewriting it in my own words would be unnecessary. A recent op-ed in The Hill did exactly that, clearly laying out the energy challenges facing the United States:

The U.S. electricity sector is a slow-moving maze of regulations, shaped by decade-long transmission approvals, time-intensive interconnection studies for new generators and large new customers, and overlapping layers of state, regional and federal bureaucracy. . . . The regulatory thicket surrounding the electricity industry was tolerable when the pace of change was slow. However, with the rise of AI and renewed growth from manufacturing and electrification, we can no longer endure a sclerotic grid.

In addition to reforming our rigid, reluctant-to-adapt grid, there are questions about whether average ratepayers should be on the hook for increased electricity demand being driven by a few large customers.

In the midst of all of these concerns, there is a U.S. Senate bill that could help fix the problem: S.3585 – DATA Act of 2026. The bill was recently referred to the Senate Committee on Energy and Natural Resources.

I have written about consumer-regulated electricity (CRE) for Missouri, which would reduce the number of state-level regulations that off-grid CRE utilities (CREUs) would face. (You can click here if you’re interested in what a CRE policy might look like in practice.) However, even if it were allowed in Missouri, there would still be many federal-level regulations that would diminish the benefits of the new practice.

That is where the DATA Act becomes so vital. The act would exempt certain new CREUs from specific federal regulations that apply to the broader grid. If our state and federal governments approve CRE, there would be a pathway for large electricity users like data centers and aluminum plants to more quickly generate their own electricity without impacting the rates of average Missourians. That would be a win for all of us.

All of this suggests that the DATA Act of 2026 is something to watch in Washington, D.C. But Missouri should not wait until the federal government makes its move. We should be proactive and allow CREs in our state, creating a pathway to address modern energy challenges that would become even more viable if federal reforms under the DATA Act follow.

The post Keep an Eye on the DATA Act in Washington, D.C. appeared first on Show-Me Institute.

The investigation and review are intended to protect ratepayers, assess Missouri’s future energy needs, and manage Missouri’s natural resources effectively. These are good objectives, but the hard question is finding a policy solution to match all those goals.

One option I have written about, consumer-regulated electricity (CRE), is worth considering. (If you’re unfamiliar with CRE, you can click the link to learn more.)

Instead of placing new data centers on the existing regulated grid, we could match data centers with an independent CRE utility (CREU). Furthermore, if electricity demand for these data centers falls short of its sky-high projections, then the excess capacity will have been a poor investment. This protects ratepayers by putting private companies on the hook for that risk instead.

There are benefits to data center developers as well. A CREU can be structured around the developer’s reliability needs and preferred energy resources. Projects could also require less transmission, as new generation facilities could be built near their customer base. CRE could be a reliable, economical, and sustainable energy solution to meet current and future energy needs.

Speed to operation is vital in today’s economy, and data center projects have experienced difficulties securing permissions from the various layers of government. While many hurdles would still remain (like local zoning), CRE projects would not require permissions from the Missouri Public Service Commission since they would not be connected to the regulated grid. At the federal level, Senator Tom Cotton recently introduced the DATA Act, which would exempt CREUs from federal regulations not designed for on-site, self-contained power systems. While still early, this legislation is worth monitoring and could further increase the speed to operation.

The governor has made it clear that he wants to meet growing energy demand in a way that protects ratepayers and addresses Missouri’s current and future energy needs. CRE is a policy approach that matches those objectives.

The post Consumer-Regulated Electricity (CRE) and Data Centers appeared first on Show-Me Institute.

The new task force is modeled similarly to Tennessee’s nuclear advisory council, which I have written about extensively. This nuclear-focused group will identify strengths to leverage, highlight regulatory and practical reforms worth considering, and serve as a touch point for potential partnerships both nationally and internationally.

After forming its nuclear advisory council in 2023, Tennessee saw notable success in attracting nuclear supply-chain and research investment, as well as a new small modular reactor (SMR) project. With a similar structure now in place, I am hopeful Missouri can achieve comparable success in bringing new nuclear investment to the state.

Missouri’s Advanced Nuclear Task Force Makeup

The task force is structured much like Tennessee’s; it is composed of different stakeholders from government, higher education, and the energy sector.

The task force is currently not a permanent body, and is required to submit an annual report to the governor and the Missouri Senate and House energy committees with a list of barriers to nuclear energy deployment and actional recommendations. It is set to dissolve after the submission of its third annual report, unless it is extended or dissolved beforehand.

What the Task Force Is Charged with Doing

As outlined in the executive order, the task force will help facilitate actionable next steps and reforms for nuclear power in Missouri.

Just as importantly, it will also be tasked with identifying public–private partnership opportunities and advising the governor on regulatory, technological, and economic developments in the nuclear sector.

With significant momentum and change in nuclear energy (trust me, I had to update my recent report on nuclear energy many times), the task force will be useful in helping Missouri policymakers remain informed and competitive.

One Suggestion in Implementation

While the executive order does not explicitly require national or international experts, the governor is granted latitude to appoint additional members. That flexibility should be used. Expertise in areas such as nuclear engineering, mechanical and civil engineering, and environmental law could meaningfully strengthen the group’s work.

Hopes for the Future

Missouri has taken a meaningful step toward nuclear investment and development. If the task force is used as intended, I am hopeful that Missouri can succeed the same way Tennessee has.

The post Missouri Forms an Advanced Nuclear Task Force appeared first on Show-Me Institute.

I remember when Game of Thrones was at the height of its popularity and its catchphrase seemed to be plastered everywhere I looked: “Winter is coming.” Today a similarly ominous refrain is echoing across the energy sector: Data centers are coming.

A data center is a physical location that houses servers and related hardware that process, store, and transmit digital information. As artificial intelligence use expands, demand for computing power is also rising at a feverish pace, driving the need for more and more energy-intensive data centers.

As in Game of Thrones, there is a certain mystery surrounding how dire the situation truly is.

In April 2024, Goldman Sachs forecast that data centers would rise from 2.5% to 8% of all U.S. electricity usage by 2030. However, Google recently reported a 33-fold reduction in their energy usage for AI text prompts in a single year. It is difficult to predict how much more energy will be needed in the coming years.

Current Missouri law protects average ratepayers from “any unjust or unreasonable costs from service to such customers [such as data centers].” However, this does not mean none of the burden of building new generation capacity will fall on ratepayers, and an overbuild based on overly aggressive demand projections could leave them paying for unused assets.

On the other hand, failure to build sufficient power supply (whether due to demand miscalculation or delays in constructing multiple plants) could cause Missouri to miss out on significant investment in the state. Worse, an underbuild could create real reliability concerns. There is real tension here, and a great deal of pressure to predict and build effectively.

Fortunately, there is a policy that could help alleviate some of this pressure: consumer regulated electricity (CRE).

The premise of CRE is fairly straightforward: allow consumer-regulated electricity utilities (CREUs) that are disconnected from the ratepayer-supported grid to create “private energy islands” for the largest new customers (such as data centers). This approach makes sense for two reasons:

1. The anticipated surge in demand is expected to be fueled by a small number of users. By isolating the electricity supply of these customers from the ratepayer-supported grid, CRE can help shield everyday customers from spikes in energy prices.
2. The increase in demand is predicted, but it isn’t certain. CRE ties both the risk and the possible rewards of building new power plants to the companies that will use the resulting energy.

This year, New Hampshire passed a law to allow CREUs to generate, transmit, distribute, and sell electricity as long as they operate independently from existing utilities and do not serve the general public (CREUs are still subject to appropriate oversight, such as the Nuclear Regulatory Commission for nuclear plants). Missouri could do something similar, and there are many reasons to do so.

#1: Protecting Ratepayers from Risk

If the projected surge in electricity demand materializes, CRE could help lessen the severity of rate increases by allowing some large customers to be served by independent CREUs. Because these facilities are privately financed and serve only their customers, their costs would not be spread across all ratepayers. If electricity demand falls short of projections, then the excess capacity will have been a poor investment.

#2: Accelerating Capacity Buildout and Investment

 Missouri needs to build new generation capacity. In a permission-first, regulated environment, that process can be slow. Letting CREUs build and operate their own generation facilities could help keep economic development from being constrained by red tape.

Further, CREUs could offer more tailored payment structures and allow companies to align their energy sources with their own environmental or strategic goals—without forcing all ratepayers to work toward those same goals.

#3: Alleviating Pressure

Not only does Missouri face new demand growth, but our two largest electric utilities are dealing with coal-plant retirements. This transition would be challenging even without a new surge in demand. CREUs would allow utilities to focus more on serving their current customers.

CRE could be an ideal response to an abrupt surge in energy demand driven by a narrow set of customers. It would provide price security to everyday ratepayers, give data centers control over their power supply, and decrease the need for governments to predict future energy demand. Data centers are coming, and CRE is worth exploring as a way for Missouri to prepare for them.

The post Data Centers Will Require Innovation in Missouri’s Energy Sector appeared first on Show-Me Institute.

Festus is not alone in its debate. Nationwide, there have been significant disputes about whether communities should want data centers in their backyards. While data centers can bring investment to a community, there are concerns about electricity, water usage, and sound.

Of the hundreds of citizens participating in the recent Festus hearing, one gentleman’s comments captured my attention. The St. Louis Post-Dispatch reported:

He urged local governments to turn any revenue gain due to the new facility into lower property taxes for the general public. He also said a data center should pay for any increase in utility rates due to the extra energy usage it requires. And, he said, the city should not offer the data center any tax incentives.

I have to wonder—has this gentleman read this article I recently published?

Jokes aside, his comments convey a few key points that I think are important to keep in mind when considering a data center project in a community.

#1: Lower taxes help drive economic growth, so a reliable course of action is to return extra revenue to taxpaying citizens.

New data center revenue ought to be returned to taxpayers through lower tax rates, easing pressure on the entire tax base. Property tax abatements should not be handed out.

#2: Find innovative solutions for electricity needs.

Last year, a major energy omnibus bill, Senate Bill 4, included a provision that protects average ratepayers from “any unjust or unreasonable costs from service to such customers [such as data centers].” This should help shield average ratepayers from rate hikes to meet this new energy demand, but some burden will likely still fall on them.

While it is a state-level solution, Missouri should explore consumer-regulated electricity (CRE), which would allow new data centers and other large customers to be served by separate, independent grids. This idea could be beneficial for both ratepayers and developers. You can read more about CRE here.

#3: Remember what data center developers are prioritizing, and do not hand out subsidies.

Lastly, the actions of the biggest data center customers have made their priorities clear.

Money does not seem to be a big factor for these enormous developers. They instead seem focused on energy availability, speed to operation, and long-term stability. A clear example of this is Microsoft pouring an enormous amount of money into restarting Three Mile Island for its data centers.

Instead of handing out subsidies, a municipality could evaluate its own permitting rules. Reducing red tape could both accelerate speed to operation and signal that the community is a dependable, long-term location.

Festus will certainly not be the last community to have a heated debate about data center development. Keeping these key principles in mind, however, may help communities have productive debates on this topic.

The post The Data Center Debate Continues in Festus appeared first on Show-Me Institute.

Consumer Regulated Electricity and Today’s Economy

CRE would allow off-grid electricity providers to generate, store, transmit, distribute, and sell electricity to new, large customers. They would not be permitted to serve the general public and would still be subject to federal regulations and other rules such as permitting and workplace safety. If a CRE utility (CREU) chooses to interconnect with the regulated grid, it would then cease to be a CREU.

While this might sound like a lot of red tape, it still cuts down on the mountain of regulations and permissions for utilities on the regulated grid that serves the general public. CRE enables innovative, profit-driven entrepreneurs to serve energy-hungry clients building things like data centers.

For example, CRE could allow a new aluminum smelting facility that needs a consistent, high-power energy supply to partner with a CREU specializing in small-modular reactors (SMR). Such a partnership would give the aluminum facility a reliable power source tailored to its needs, with a payment structure negotiated privately between both parties. The aluminum facility could even use industrial heat from the SMR for its own high-intensity manufacturing processes.

Another benefit of CRE is increased flexibility. The energy sector is rapidly changing. Forecasting future demand is difficult even under stable conditions, but today’s landscape makes accurate prediction even more challenging.

Consider artificial intelligence. Many projections warn of an immense spike in electricity demand from data centers needed to power artificial intelligence, while others suggest innovation could make these systems far more efficient. Either way, relying on regulators alone to anticipate these trends and build capacity accordingly is risky for ratepayers who need electricity but also end up paying for new construction.

Free-market mechanisms like CRE would distribute that risk. If demand rises sharply, CRE utilities could more quickly deploy new generation to meet some of it, easing pressure on the regulated grid and diminishing rate hikes. If demand falls short, the CREUs and their customers would be responsible for the financial cost of overbuilding, not captive ratepayers.

Illinois’s willingness to explore CRE shows a growing recognition that the traditional utility model may not be the best way handle modern energy challenges. Allowing CRE in Missouri could attract investment, foster innovation, and relieve stress on the regulated grid and ratepayers. This is a policy Missouri should consider.

The post Illinois Explores Free-Market Energy Policy appeared first on Show-Me Institute.

The data center discussion is highly nuanced, marked by an interesting mix of not-in-my-backyardism and yes-in-my-backyardism.

This debate has touched down in Platte County in the Kansas City area, where “Project Kestrel” would grant substantial property and sales tax subsidies to support the development of a new, $100 billion data center campus. But is this the right move for Platte County, or for Missouri?

Missouri is in need of investment, and artificial intelligence and associated data centers already play a significant role in our economy.

However, economic development subsidies enrich individual developers at the expense of taxpayers, schools, and other public services. Using tax subsidies to lure data centers, filmmakers, sports teams, and others into Missouri shrinks the tax base of the region without leading to meaningful economic growth. Opportunity costs are largely ignored, with estimates for economic “boosts” not taking into account what the millions given away in subsidies could have achieved if invested in infrastructure, public safety, education, or tax rebates for Missourians.

Looking at electricity, data centers are enormous consumers that are prompting the buildout of new generation facilities. On a regulated grid, such as Evergy’s in the Kansas City area, building new generation and associated transmission is one of the most expensive processes for average ratepayers, because monopoly utilities are allowed to recoup the cost of their capital investments and typically earn a government-approved profit.

Now, it is true that average Missourians use artificial intelligence, indirectly driving the increased demand for data centers. It is also true that we currently cannot predict with certainty the amount of electricity artificial intelligence and data centers will ultimately require.

In April 2024, Goldman Sachs forecast that data centers would rise from 2.5 percent to 8 percent of all U.S. electricity usage by 2030. However, Google recently reported a 33-fold reduction in energy usage for AI queries in a single year.

Some legislation has been passed in an attempt to shield average Missourians from bearing “unjust or unreasonable” costs of powering new data centers. However, this does not mean that none of the burden of new power-plant construction will fall on average ratepayers. Furthermore, if utilities overbuild generation capacity based on overly aggressive demand projections, average ratepayers could find themselves footing the bill for underused assets.

Yet, there is risk in veering too far in the other direction as well: An underbuild of new generation would likely lead to Missouri missing out on significant investment.

To navigate this dilemma, policymakers in Missouri should think outside of the box. Instead of solely considering solutions inside the regulated, ratepayer-supported grid, Missouri should follow New Hampshire’s example and consider consumer regulated electricity (CRE). The idea is simple: huge customers like data centers are driving up electricity demand and putting strain on the grid and ratepayers. CRE would allow off-grid electricity providers to build and operate generation and transmission facilities whose output would be sold exclusively to these new customers. This approach would help shield Missouri ratepayers from both the rate hikes that would otherwise come with new plant construction and the risk of overbuild. CRE would also provide developers with speed, flexibility, and certainty—attractive qualities that are often lost to red tape and lengthy regulatory approval processes.

Adopting CRE could help ease tensions in Platte County and across the state. Of course, the pressure to offer tax subsidies would remain, but this problem is not exclusive to data center development. Corporate handouts are not the way to encourage economic growth. Instead of trying to lure businesses with subsidies, Missouri should have a free market–oriented economic and regulatory environment; for example, one that is conducive to polices like CRE.

The post Data Centers, Subsidies, and Electricity in Platte County and across Missouri appeared first on Show-Me Institute.

While no site has yet been selected for a TerraPower reactor, lessons from Wyoming and recent federal reforms offer clues about what might come next. As I have written before, the federal government has put extensive emphasis on converting retired coal plants into advanced nuclear reactors. These conversions, according to the U.S. Department of Energy, can save up to 35% on construction costs and retain much of the existing workforce. In Wyoming, TerraPower is currently building a reactor on a former coal site, and it would not be a surprise to see Kansas follow suit. This model could highlight a potential path forward for nuclear adoption in the historically coal-dominant Missouri.

Federal Reform and Cost Savings for Coal-to-Nuclear Transitions

The concept of coal-to-nuclear has drawn bipartisan attention in Washington, D.C., and has been codified in the recent ADVANCE Act, which directs the Nuclear Regulatory Commission to develop and implement strategies to enable more efficient licensing reviews for converting former coal plants and other former industry infrastructure into nuclear reactor sites.

A report prepared by experts at the Idaho, Oak Ridge, and Argonne National Laboratories found that these projects can achieve significant savings by repurposing existing infrastructure, such as steam-cycle components, since both nuclear and coal are thermal power plants that rely on generating steam to turn a turbine.

Missouri’s Long History with Coal and Transitioning Our Workforce

Coal has long been king in Missouri. Despite recent closures, Missouri remains the fourth most reliant state on coal, with coal supplying 57% of electricity generation in 2024. That legacy presents both a challenge and an opportunity.

Missouri has several coal plant sites that could be strong candidates for advanced nuclear conversion. A study from Oak Ridge National Laboratory identified three Missouri coal power plant sites (retired or slated for retirement between 2020 and 2040) as suitable for hosting a number of reactors.

Not only is there an opportunity to make use of our physical infrastructure, but Missouri can also use our existing workforce. The U.S. Department of Energy notes that many coal-plant and nuclear-plant jobs share identical or similar occupation codes, meaning a large portion of the existing workforce could transition with minimal retraining.

A Nuclear Advisory Council Could Help Identify Steps for Missouri

Another way to better identify potential nuclear sites is by creating a nuclear advisory council. If Missouri brought together the best and brightest minds in nuclear energy to discuss our unique opportunities, analyze trends in federal regulation, and address our state’s weaknesses, the Show-Me State could become a significant player in nuclear development.

Kansas is moving along in its process. Let’s hope the Show-Me State doesn’t let this same opportunity pass it by.

Interested in Nuclear Energy in Missouri?

Read my recent report, Connecting Nuclear Energy’s Past and Present: Guiding Missouri’s Future, here.

The post Considering Coal-to-Nuclear Transitions in Missouri appeared first on Show-Me Institute.

These days, though, I have come to love St. Louis too. It is a big city with a small-town feel. I go to an amazing church, and there is always something new to do or see.

Growing up in East Tennessee, I know firsthand how much that region has been defined by nuclear innovation, a tradition that continues today. Recently, Oklo Inc. announced that it plans to build a $1.68 billion nuclear recycling facility in Oak Ridge, Tennessee, which is a stone’s throw away from my hometown. This project joins a wave of planned nuclear investments in the region, including a multibillion-dollar uranium enrichment facility and the planned construction of a new small modular reactor (SMR).

While I am excited for East Tennessee, I also want Missouri to grow and thrive. Leaders here have recognized the importance of nuclear power, with Governor Kehoe stating that we need to build new nuclear at “business speed.” If Missouri wants to attract the same kind of investment Tennessee has, we should follow its example, starting with the creation of a nuclear advisory council.

What Could a Nuclear Advisory Council Look Like?

Just as Missouri should take note of Tennessee’s zero-income-tax advantage, we should also learn from its policies on nuclear energy.

In my recent report, Nuclear Energy’s Past and Present: Guiding Missouri’s Future, I detail how the formation of a nuclear advisory council—modeled after Tennessee’s—could help fortify our grid and attract needed investment to our state. A council would bring together the brightest minds to provide accessible information, engage with stakeholders, and foster key partnerships at no cost to taxpayers.

Our state already has unique assets that position us well for nuclear development, and a council could advise how to best use these strengths. It could also flag weaknesses in regulation, workforce development, or siting. Further, a council could help identify opportunities for utilities or even independent off-grid electricity providers if our state allows it.

Tennessee’s council, created by an executive order from Governor Bill Lee, has already helped signal resolve to interested developers and foster a more nuclear-friendly environment. Missouri has the ability to do the same.

Creating a nuclear advisory committee is a simple first step. Hopefully, another big nuclear investment next door can motivate Missouri to follow in Tennessee’s footsteps (and maybe we can also start making all iced tea sweet by default, please).

Interested in this idea? Read a more in-depth analysis in my recent report:

Connecting Nuclear’s Past and Present: Guiding Missouri’s Future

Check out these other related articles:

Forming a Missouri Nuclear Advisory Council

Missouri’s Nuclear Opportunity with Avery Frank

What Could New Executive Orders on Nuclear Mean for Missouri?

The post Tennessee Lands Another Nuclear Project appeared first on Show-Me Institute.

In my recent report, Connecting Nuclear’s Past and Present: Guiding Missouri’s Future, one of the policy solutions I offer to meet electricity demand is consumer-regulated electricity (CRE). In short, CRE would allow for the creation of private energy entities, disconnected from utility grids, in order to serve the largest customers more efficiently.

A recent article on this topic caught my eye. The article mentions that delegates at the World Nuclear Association summit in London discussed forming private energy clusters, disconnected from the grid, to meet surging demand from data centers.

Doesn’t that sound familiar?

Bringing Energy Clusters (or CRE) to Missouri

A few weeks ago, New Hampshire’s governor signed into law House Bill 672, which allows for “off grid electricity providers”—independent and disconnected from the main grid—to generate, transmit, distribute, and sell electricity.

Whether you call it CRE, off-grid providers, or private energy clusters, the concept is similar: enabling private energy systems to serve large industrial customers with less delays, less red tape, and less pressure on the main grid and ratepayers.

Poland and the Netherlands are beginning to consider the use of energy clustering to meet industrial energy needs. The previously mentioned article identifies a few potential benefits from energy clustering:

• It would allow large customers to take their electricity from a co-located generation source
• If a thermal energy source like nuclear is used, large customers could use its industrial heat (high-temperature steam used in industrial processes like manufacturing)
• The energy developer would benefit from simplified project finance
• Both consumers and developers would avoid long transmission lines
• These clusters would also help reduce the burden on grid resources, which are at a premium in most markets and in Missouri

CRE gives large customers the option to use an energy source of their choice, so long as they meet the still-applicable regulations (such as the Clean Air Act for fossil-fuel plants).

As we have seen with the drastic actions of Meta, Microsoft, and Google, there is a market for this type of arrangement as these huge customers have sought connection to nuclear reactors. States and countries are taking notice of these market conditions and are bringing the free market into the energy sector.

Missouri needs to reduce pressure on the grid and attract investment. In the upcoming legislative session, lawmakers should seriously evaluate how CRE—or private energy clustering—could benefit consumers, energy developers, and ratepayers in our state.

Want to read more? Check out these related articles:

Connecting Nuclear’s Past and Present: Guiding Missouri’s Future

New Nuclear Energy: Business-Speed and Business Friendly

Mission Impossible and Nuclear Energy

One Way Missouri Could Keep its Grid Reliable

Weighing Consumer Regulated Electricity to Meet Energy Demand Growth

Missouri Needs to Be Prepared for Growing Energy Demand

The post Is Consumer-Regulated Electricity Going Worldwide? appeared first on Show-Me Institute.

Brief Background of the Endangerment Finding

To oversimplify, the Endangerment Finding declares that a mix of six greenhouse gases pose a threat to public health and welfare, primarily because they contribute to climate change. These six gases are carbon dioxide (CO₂), methane, nitrous oxide (N₂O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF₆). In the finding, the EPA observed that U.S. motor vehicles and engines emitted four of those greenhouse gases, which collectively amounted to 4.3 percent of global GHG emissions in 2005.

Thus, the agency concluded that vehicle GHG emissions also endanger public health and that “contributors must do their part even if their contributions to the global climate change problem, measured in terms of percentage, are smaller than typically encountered when tackling solely regional or local environmental issues.” Prior to this, the EPA did not regulate greenhouse gases.

As a result, the Endangerment Finding has been crucial for allowing the EPA to regulate vehicle GHG emissions and reduce them, which in part has paved the way for electric vehicles (EVs).

The EPA’s 2025 Proposal and Potential Impacts

The recent proposal to rescind the Endangerment Finding leans on a few key arguments:

(1) The authors of the proposal argue that the EPA exceeded its statutory authority under the Clean Air Act, which was designed to regulate “criteria pollutants” that include nitrogen oxides (NOₓ), sulfur oxides (SOₓ), particulate matter, carbon monoxide, ozone (O₃), and lead (Pb).

These criteria pollutants have direct effects on human health—eye, nose, throat irritation; aggravation of respiratory diseases such as asthma, coughing and difficulty breathing, cardiovascular disease, heart attacks, chest pain, and more. The proposal argues the effects of GHGs on human health through climate change are indirect, and should not be regulated under the same directive.

(2) The authors of the proposal claim that the Endangerment Finding’s measures of harm, such as more frequent heat waves and extreme weather events, have not borne out despite increases in GHG concentrations (driven primarily by increased emissions from foreign sources).

(3) The authors question whether federal mandates regulating vehicle GHG emissions can meaningfully address climate change as they claim there is no existing technology capable of making a “measurable” impact.

One excerpt from the EPA’s proposal conveys the potential impact on the automobile industry, if finalized:

“In connection with the proposed rescission of the Endangerment Finding, if finalized, this action would remove all existing regulations that require new motor vehicle and new motor vehicle engine manufacturers to measure, report, or comply with GHG emission standards . . .

. . . As a result of these proposed changes, motor vehicle and engine manufacturers would no longer have future or current obligations for the measurement, control, or reporting of GHG emissions for any vehicle or engine, including for previously manufactured [model years] MYs. However, we [EPA] are not proposing to reopen or modify any regulations necessary for criteria pollutant and air toxic measurement and standards, Corporate Average Fuel Economy (CAFE) testing, and associated fuel economy labeling requirements.”

In theory, if the finding is rescinded, we could see lower car prices. (However, this is not  guaranteed because car companies have priorities of their own). Repealing the Endangerment Finding, along with the One Big Beautiful Bill’s (OBBB) phase-out of EV tax credits, could bring significant shifts to the transportation sector.

The post The EPA Continues to Review Carbon Emissions Standards appeared first on Show-Me Institute.

Susan Pendergrass speaks with Show-Me Institute policy analyst Avery Frank about his new report, Connecting Nuclear Energy’s Past and Present: Guiding Missouri’s Future. They discuss why electricity demand is rising again, why major companies are turning back to nuclear, and how Missouri can position itself to benefit. From data centers and AI to regulatory hurdles and smart policy steps like a state nuclear advisory council, Avery explains how Missouri could play a leading role in America’s nuclear resurgence.

Listen on Spotify

Listen on Apple Podcasts 

Listen on SoundCloud

Timestamps

00:00 The Resurgence of Nuclear Energy
03:37 Challenges and Historical Context
07:30 Missouri’s Nuclear Potential
12:06 Future of Nuclear Energy and Policy
16:09 Conclusion and Future Outlook

Transcript

Susan Pendergrass (00:00)
This morning we’re joined on the podcast by Avery Frank, policy analyst at the Show-Me Institute. You’ve got a paper out, and I’m really looking forward to talking to you about it because I have a lot of questions. You’ve done a lot of research and analysis around nuclear energy, and I see a lot in the media these days about the resurgence of nuclear energy.

Number one, why does nuclear energy seem to be back, bigger and better than ever? And secondly—well, I’ll start with that. Why is nuclear energy back in the news so much?

Avery Frank (00:34)

Nuclear power surged in the United States during the Cold War. Electricity demand was soaring—it kept going up and up. Nuclear energy is clean, reliable, and powerful. Just in Missouri, we have one nuclear power plant and it supplies 14% of the entire state’s electricity. So when you need a lot of electricity, nuclear power is something you can turn to.

Since 2007, electricity demand has pretty much flatlined as we’ve become more efficient. But with data centers, artificial intelligence, and electric manufacturing, electricity demand is back on the rise, looking similar to Cold War–era growth. Just data centers by themselves are supposed to go from 3% of U.S. electricity demand today to 8–12% by 2030. That’s a huge jump.

Susan Pendergrass (01:56)
Well, if it’s so great, why did it go away? I remember Three Mile Island, and I saw the movie about Chernobyl. When it gets bad, it gets really bad. Why did nuclear go away so hard if it’s such a great, clean, reliable source of energy?

Avery Frank (02:26)
I’d say it went away for three key reasons: public fear, regulation, and regulatory attitude. Most of the time, public fear from events like Three Mile Island drove increased regulation.

Two key events stand out. First, the National Environmental Policy Act (NEPA) *correction* in 1970. That was a huge blow for the nuclear industry. Construction costs went up 25% and projects took two years longer. Then came Three Mile Island in 1979. It was mitigated by safeguards, but public fear skyrocketed. Costs afterwards were three times higher and construction took twice as long. That was the big turning point.

Susan Pendergrass (03:54)
Then if it’s that expensive, why is it coming back?

Avery Frank (04:14)
Companies are turning to nuclear out of desperation. They need a lot of power, as I mentioned with data centers, but they also have clean climate pledges. They can’t really do it with solar or wind. They’re kind of backed into a corner.

Susan Pendergrass (04:20)
Why not solar or wind?

Avery Frank (04:39)
Solar and wind are intermittent resources. Nuclear plants run consistently. Data centers can’t have outages—you need steady, reliable power. That’s what nuclear does best.

Susan Pendergrass (05:08)
Does it generate a lot of nuclear waste?

Avery Frank (05:15)
In the U.S. we use a once-through cycle. We refine uranium, put it in a plant, then seal it up forever. Other countries like France and Japan recycle their fuel. About 96% of spent fuel is still reusable, but the U.S. stopped recycling in the 1970s. If we restarted, we could reduce waste significantly, which already isn’t that large to begin with.

Susan Pendergrass (06:09)
So what could Missouri be doing right now to take advantage of this moment?

Avery Frank (06:32)
Timing is key. Missouri already has advantages: intellectual capital, infrastructure, the Missouri University Research Reactor, and Missouri S&T producing top nuclear engineers. We also have retiring coal plants that could be retrofitted into advanced nuclear plants, cutting costs by up to 35%.

Federal reforms like the ADVANCE Act are making things easier, but Missouri could act too. For example, we could form a Nuclear Advisory Council, like Tennessee did, to identify strengths and weaknesses and make recommendations. That’s attracted significant investment there.

Susan Pendergrass (08:14)
What about public-private partnerships?

Avery Frank (08:37)
That’s a great point. We believe the free market can play a big role, just like it did in space travel. One idea is Consumer Regulated Electricity (CRE), where private developers build small modular reactors for large customers like data centers on their own dime, outside the regulated grid. That takes the burden off ratepayers while meeting rising demand.

Susan Pendergrass (10:26)
Because I assume energy demand forecasts keep being revised up, right?

Avery Frank (11:03)
Exactly, and they’re hard to predict. What if AI suddenly uses less power? Then Missouri could be stuck with excess nuclear capacity. Letting the free market take some of that risk makes sense.

Susan Pendergrass (11:39)
What about the last Missouri legislative session?

Avery Frank (12:06)
Senate Bill 4 passed. It was a big utility bill that allowed “construction work in progress,” meaning utilities can charge ratepayers during construction, not just when a plant comes online. It’s unclear if it applies to nuclear, but it could. I’ve suggested treating it more like a bond, so consumers who shoulder the risk also see some reward, like lower rates or refunds.

Susan Pendergrass (13:44)
Any other signs that Missouri welcomes nuclear investment?

Avery Frank (13:47)
Yes. I attended the Missouri Nuclear Energy Summit in Columbia. Governor Kehoe was there and said we need to develop nuclear at business speed, not bureaucratic speed. That shows real resolve. Legislators are supportive too. Missouri has the advantages and infrastructure—we just need the right regulatory environment.

If Missouri created a Nuclear Advisory Council, like Tennessee, it could attract significant investment and expertise. Energy availability is now one of the top factors for companies deciding where to locate. If Missouri can offer abundant, reliable, clean energy, we’ll be far more competitive.

Susan Pendergrass (16:20)
That’s awesome. You have a paper out on this, available at showmeinstitute.org. Thanks for coming on and explaining it to us.

Avery Frank (16:32)
Awesome, thank you for the interview, Susan.

Produced by Show-Me Opportunity

The post Missouri’s Nuclear Opportunity with Avery Frank appeared first on Show-Me Institute.

Click here to read the full report.

The post Connecting Nuclear Energy’s Past and Present: Guiding Missouri’s Future appeared first on Show-Me Institute.

Below are some new directives that could be relevant to our state’s energy future.

Expediting Nuclear Construction at Federal Sites

One order calls for the deployment of advanced nuclear reactors at both military installations and Department of Energy (DOE) facilities, with timelines that call for completion of the projects near the end of President Trump’s term. To support these goals, the Secretaries of Energy and Defense are required to collaborate with the Chairman of the Council on Environmental Quality to apply existing and establish new exclusions to certain requirements from the onerous National Environmental Policy Act (NEPA).

If next-generation reactors are brought online, then this could trigger a broader wave of nuclear construction across the country, as another order requires the Nuclear Regulatory Commission (NRC) to “establish an expedited pathway to approve reactor designs that the DoD or DOE have tested and demonstrated.”

Essentially, it seems the administration is trying to lighten the load of nuclear regulation for the DoD and DOE, and if they succeed with these new reactors, then utilities and developers could follow in their footsteps.

Reevaluating Longstanding Regulation and Radiation Standards

One of the primary barriers to new nuclear development has been construction costs. Many of these costs have stemmed from the adoption of NEPA and the incident at Three-Mile Island (TMI) creating new, stringent regulations.

One study notes that for reactors already under construction when the accident at TMI occurred, median costs were almost three times higher and plants took almost twice as long to complete (not including costs of interest, delays, etc.) than plants that received their operating licenses before TMI. NEPA also had a similar, yet smaller, effect on construction costs and timelines.

To address these issues, another order calls for sweeping reform of the NRC’s operations and regulations. The Department of Government Efficiency (DOGE) is directed to help reorganize the NRC in order to better support innovation and expedite licensing.

Reform is also targeted at the longstanding radiation standards established in the 1970s. To oversimplify, these standards assume there is no safe threshold of radiation exposure, even those below levels that naturally occur in the environment. Essentially, if a nuclear developer can reasonably lower its levels of radiation exposure, it should, regardless of cost or relative risk. These policies have contributed to rising costs and a lack of predictability in both the licensing and construction process. The new executive orders direct the NRC to consider adopting a fixed and predictable exposure threshold, which should improve the environment for financial investment in nuclear.

These are just some of the key changes that are occurring in nuclear energy. If Missouri is to take part in the industry’s growing resurgence, we should be paying close attention to these developments. One way to do this is by establishing a Missouri nuclear advisory council. Such a council could bring experts together to present critical information for new development, assess emerging opportunities, and identify areas for improvement within the complex and rapidly changing nuclear landscape.

Listed are all four executive orders, each issued on May 23, 2025:

(1) Deploying Advanced Nuclear Reactor Technologies for National Security

(2) Reinvigorating the Nuclear Industrial Base

(3) Ordering the Reform of the Nuclear Regulatory Commission

(4) Reforming Nuclear Reactor Testing at the Department of Energy

The post What Could New Executive Orders on Nuclear Mean for Missouri? appeared first on Show-Me Institute.

While I will avoid any spoilers, the new movie, Mission Impossible: The Final Reckoning, has an eerie resemblance to current events. The seventh and eighth films in the franchise revolve around a rogue artificial intelligence (AI) entity taking over cyberspace, with different nations racing against the clock to capture this entity and dominate the rest of the globe. The plot today may be different, but the emerging battle for AI-supremacy seems similar.

Recently, President Trump issued four executive orders aimed at unleashing nuclear energy to establish America’s “energy dominance” and maintain national security amid a potential global AI arms race. These orders could lead to the repeal or reform of burdensome regulations that have constrained the American nuclear industry in past decades. Did I expect national security to be a key driver of nuclear energy reform? Not exactly, but this is not an unprecedented scenario.

From the Battlefield to the Home Front

At the height of World War II, nations began working to apply atomic physics to wartime technology. This led to America achieving the world’s first self-sustaining nuclear reaction under the stands of Stagg Field in Chicago. While nuclear technology’s first use was in the atom bomb, its debut as an energy source came soon after with the launch of the USS Nautilus in 1954.

Since then, the technology has had a prominent role in both military and civilian affairs. Nuclear reactors are used to power submarines and aircraft carriers, and 19 percent of the United States’ electricity generation comes from nuclear power plants. National security had a role in its origin story—and now, it may be a factor in the nuclear industry’s resurgence as well.

An Opportunity for Missouri

To win an AI arms race, speed and time are of the essence. Missouri could position itself as a strategic partner by finding ways to more quickly connect new nuclear power to energy-intensive AI data centers.

One policy that could shorten the time of construction of nuclear power plants and also protect Missouri consumers from price hikes is consumer regulated electricity (CRE).

In theory, CRE would allow private investors to create new, independent electric power systems (encompassing both generation and transmission) using their own capital. These private grids would be scaled to meet new demand growth from large consumers. In order for a CRE entity to operate appropriately, it would need to be free from restrictions placed by the Missouri Public Service Commission (MPSC). That means CRE systems would need to be unconnected to the regular grid and serve only new industrial and large commercial customers—like AI data centers.

CRE could not only attract investment but also relieve strain on the primary grid and ratepayers. Rather than relying on ratepayers to fund new power plants to accommodate rising electricity demand (driven by large consumers), CRE could provide a targeted solution. New Hampshire passed a CRE measure this year, and Missouri may benefit from evaluating how its statutes could be amended to allow for such innovation.

By connecting it directly with national security, the Trump administration has made the development of nuclear-energy infrastructure an urgent priority. The mission for Missouri—if our policymakers choose to accept it—is to position the state to take part in the revitalization of nuclear power and reap the accompanying economic benefits. Adopting CRE is one important way in which Missouri could help meet the nation’s needs while benefiting in the process.

The post Mission Impossible and Nuclear Energy: President Trump’s New Executive Orders appeared first on Show-Me Institute.

Today, many Missourians receive electricity from state-approved monopoly utilities, which own and manage the generation, transmission, and distribution of electricity for their customers within exclusive service territories. Transitioning to a retail competition system would shift the ownership of generation from state-approved monopolies to private entities competing to sell power, while transmission and distribution would remain under utility control.

Responding to Change

The energy sector is in a state of flux, with several critical uncertainties lingering:

• How accurate are current energy demand forecasts?
• Will technological advancements from artificial intelligence significantly reduce energy consumption, and if so, how soon?
• What is the trajectory of electric vehicle adoption?
• How will the Trump administration’s regulatory reforms, such as recent changes at the Environment Protection Agency (EPA), impact the coal industry?
• Will the Nuclear Regulatory Commission (NRC) enact needed reform?

These unknowns highlight the challenges of relying on a regulated monopoly model, where long-term infrastructure planning is guided by government oversight rather than market signals. Competitive markets, on the other hand, offer greater adaptability. For example, the rise of hydraulic fracturing led to significantly lower natural gas prices over the last decade. Customers in competitive markets experienced the benefits of low gas prices sooner than customers in monopoly markets did.

Additionally, in a competitive market, private suppliers, not ratepayers, bear more financial risk of failed energy investments. If there is a significant cost overrun or if a project fails to come online, customers have less exposure as they can switch to another supplier or remain insulated through competitively priced default service (if they do not select a supplier).

Further Considerations

Despite the benefits of retail competition at the state level, other free-market reforms are needed. Energy regulation is complex, with overlapping layers of subsidies, taxes, and federal mandates distorting market forces. A truly free and competitive energy market would require broader regulatory reforms at the federal level to ensure private developers can better respond to market demand.

Another key consideration is the role of incumbent utilities in a competitive system. House Bill 417 requires utilities to divest their generation assets before retail choice begins, but it grants them discretion in how they do so. Utilities like Ameren could choose to sell their power plants to unaffiliated private developers or transfer them to a newly formed competitive affiliate, as long as the transaction occurs at fair market value and receives commission. As Missouri considers this transition, it will be important to define the appropriate role of former monopolies in a newly competitive market.

Retail competition is not a silver bullet, but it could introduce market forces to a historically insulated energy sector. Missouri policymakers ought to consider how implementing retail competition might work, and what potential barriers exist at both the state and federal levels.

The post Retail Competition in the Energy Market appeared first on Show-Me Institute.