Kan. flirts with repeal of renewable energy standard

March 27, 2014 by  
Filed under Green Energy News

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Kansas, the last of 30 states to adopt a renewable energy standard, toyed this week with becoming the first to roll back a green power mandate.

Just hours after the Kansas Senate approved a bill to repeal the state’s renewable law, the House voted the measure down 77-44 yesterday.

The battle over the Kansas law is one of many that have played out across the country in the past two years as conservative groups and a faction of Republican lawmakers have sought to undo state renewable requirements. This week, they came close to scoring a significant and symbolic victory in Kansas, one of the nation’s top states for wind energy production.

Renewable energy advocates, meanwhile, have rallied to protect the standard in Kansas, home to 19 wind farms representing almost 3,000 megawatts of generating capacity. Here renewable energy is synonymous with the wind industry — the subject of vigorous debates in the House and Senate.

And despite the House victory for wind supporters, they’re still wary. A week and a half remains in the regular legislative session, and a two-week veto session begins April 30.

“We certainly anticipate there will be multiple attempts before the session ends to continue this assault on the RPS,” said Dorothy Barnett, executive director of the Climate and Energy Project, a nonprofit clean energy advocacy group based in rural Hutchinson, Kan.

The renewable standard battle playing out in the Plains is also being watched across the country. Kansas is a bellwether state for the battle over renewable standards, which are credited with helping jump-start wind and solar development. Kansas is not only a major wind energy producer, it’s also home to a conservative Legislature and Charles and David Koch, co-founders of Americans for Prosperity, a group that has been among the most critical of the green energy mandates.

“This is an important victory nationally for renewable energy and the transition to a clean energy economy,” said Jeff Deyette, assistant energy research director for the Union of Concerned Scientists in Cambridge, Mass.

What’s the effect on rates?

The Kansas Republicans who argued to undo the law argued the renewable energy standard has driven up electricity rates — a point cited by the state Chamber of Commerce when the business group made repeal of the law one of its legislative priorities this spring.

Sen. Forrest Knox, a farmer and rancher from rural southeast Kansas, predicted the Dec. 31 expiration of the federal production tax credit for wind energy would shift the cost burden for new wind farms to utility ratepayers.

“The wind industry in Kansas is robust today, and it’s doing very well,” he said. “Federal money has paid for it, and the money has gone away.”

But during debate on the Senate floor Tuesday evening, Sen. Marci Francisco, a Democrat from Lawrence, said a report from state utility regulators showed the opposite to be true. Other factors, including the need to install pollution controls on coal-fired power plants, have been a bigger driver of electricity rates than renewable development.

In fact, the renewable standard requires the state utility commission to produce an annual report detailing the law’s impact on utility rates. The most recent report, out March 1, showed cost attributable to renewables represents just 0.21 cent of the 9.55-cent average retail price of electricity across the state.

“Thus, renewable generation requires less than 2.2 percent of the revenue requirement of the utilities while renewable generation supplies about 15 percent of the peak demand in the state,” the report said.

“I think that is saying that wind is paying off,” Francisco said.

Kansas’ 2009 renewable standard specifically requires investor-owned utilities and electric cooperatives to meet an increasing portion of annual peak demand with energy from the sun, wind or biomass. The current requirement is 10 percent, a level that steps up to 15 percent next year and 20 percent in 2020.

Elected officials on both sides of the debate did agree on one thing: Wind already powers almost one in five homes in Kansas. And utilities subject to the renewables requirement — which didn’t take a position on the repeal bill — are at or near the 20 percent threshold years in advance of the statutory deadline.

The state’s largest electric utility, Westar Energy, has 670 MW of renewable generation in its portfolio and just executed a contract to buy an additional 200 MW from a wind project just southeast of Wichita that begin operation next year.

With the addition, almost 18 percent of Westar’s peak retail load will come from renewable resources — almost exclusively wind. And the company sees no trouble reaching 20 percent in the next six years.

‘Another government mandate’

So why does it matter whether the renewable law remains intact if the goals of the law have largely been achieved? It depends on whom you ask.

Critics don’t believe the numbers in the Kansas Corporation Commission’s rate impact study, and they say if consumers are paying only a few dollars a month more for renewable energy, it’s a few dollars too much. They argue the wind industry is heavily subsidized and express a disdain for any sort of government mandate.

“This is symbolic,” said Sen. Robert Olson, a Republican from Olathe, a Kansas City suburb. “We’re sending the right message. Wind should stand on its own.”

The Kansas chapter of Americans for Prosperity, a group that evangelizes on free market economics and limited government, has been at the forefront of the effort to repeal the renewable standard and produced a television ad that ran statewide, linking rising electricity rates in Kansas to the renewable standard and former Gov. Kathleen Sebelius (D), now secretary of Health and Human Services.

“Like Obamacare, it’s another government mandate we can’t afford,” the ad said.

Supporters, too, marshaled resources to protect the law. Even if it won’t by itself spur a lot of additional wind development for Kansas utilities, they say a repeal of the renewable standard would send the wrong message to wind developers and manufacturers responsible for 13,000 jobs in the state and millions of dollars in economic activity.

“Having the policy on the books in Kansas communicates that we value the industry,” said Karin Brownlee, a former state senator and Sebelius Cabinet member who now works for Kansans for Wind Energy, an advocacy group. “It communicates stability and predictability.”

They also say public support is on their side.

A January poll commissioned by the Wind Coalition and the Climate and Energy Project found 91 percent of Kansans support using renewable energy, and 73 percent of Republicans support the renewable standard.

“The numbers are off the charts,” Barnett said. “You don’t get 91 percent support from Kansans for anything — Mom and apple pie, maybe.”

Carol Voran, a county commissioner in Kingman County, a county of fewer than 8,000 people in south-central Kansas, is among those supporters. She traveled to the capital last month as part of a group seeking to save the renewable law.

Voran told legislators that economic development is especially difficult in rural areas like Kingman because of the lack of a workforce — a reason the county benefited from the Flat Ridge II wind farm co-owned by BP Wind Energy and Sempra. The county benefited from both the jobs the project directly created and the $3,000-per-kilowatt in-lieu-of-tax payments that brought the county needed revenue.

She can’t figure out why the Legislature would want to do anything to discourage additional wind development and help counties like hers.

“What kind of message are we sending?” she asked.

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