By Matt Kasper
Lawmakers in Kansas this week have started to hold hearings regarding the state’s existing renewable energy portfolio standard (RPS). Lawmakers in both the Senate and the House are aiming to roll back the states’ RPS.
The Senate Utilities committee voted to pass Senate Bill 82 out of committee and on to the full Senate yesterday. While the House Energy and Environment committee has HB 2241 scheduled for a final hearing on Thursday, February 21.
SB 82 would delay certain percentage targets of the RPS requirement which would mean instead of an RPS of 20 percent by 2020, it would be an RPS of 20 percent by 2024. The bill would also give authority to the Kansas Corporation Commission (KCC) allowing the commission to delay a utility’s RPS requirement if there was a “showing of good cause.”
HB 2241 would completely get rid of the 20 percent target by 2020, and change the law to a 15 percent requirement by 2018. The bill also states that:
Each megawatt of eligible capacity in Kansas installed after January 1, 2000, shall count as 1.10 megawatts for purposes of compliance.
This means that Kansas’ 2,712 megawatts of wind power, if installed after January 1, 2000, would now become 2,983 megawatts — resulting in an inflated percentage of wind energy power and an inflated total of renewable energy when applied to all eligible technologies.
Essentially, the bill aims to roll back the RPS twice.
Kansas enacted an RPS in May 2009 but was finalized in 2010. If this bill was enacted, Kansas would become the first state to have an RPS law weakened.
Representative Dennis Hedke, chairman of the House Committee on Energy and Environmental Policy said, “We want to do everything we can to allow market forces to dictate any infrastructure build out. We don’t want to mandate. We are an all-of-the-above state.”
Tim Carpenter at the Topeka Capital-Journal points out that Rep. Hedke is a geophysicist consultant for the oil and gas industry.
But, Kansas Governor Sam Brownback is a big proponent of wind energy in his state and was “pleased” when Congress extended the production tax credit (PTC) in January. As a senator, Brownback even introduced a bill to establish a federal renewable electricity standard.
The American Wind Energy Association highlights Kansas’s renewable energy standard policy as a driving factor in helping the state attract wind projects and manufacturers like Siemens. According to the Kansas Energy Information Network, 11 of Kansas’s 21 wind farms began operating between 2010 and 2012 — eight of them in 2012 alone.
Empire District Electric, a Kansas utility, had already decided to purchase wind power due to the high natural gas prices at the time, and also purchased a high percentage of natural gas base load generation. Empire wrote to its shareholders, “[Wind energy power purchase agreements] decrease our exposure to natural gas, provide a hedge against any future global warming legislation and help us give our customers lower, more stable prices.”
Also prior to the renewable energy standard legislation, the Kansas City Board of Public Utilities saw wind power as “a hedge against high market purchase prices” and estimated that their 20-year power purchase agreement for wind power would save the utility $3 million during the first decade.
The Kansas Corporation Commission, which established the rules and regulations in 2010 for the state’s renewable energy standard, recognized the problems caused by volatile fossil fuel prices, noting that wind energy in a state’s energy portfolio protects consumers. The commission stated:
Natural gas, coal, and wholesale power prices have all experienced significant volatility and upward trending costs. Wind generation provides value as insurance for customers from some of the effects of unexpectedly high and volatile fuel and wholesale energy prices.
The Heartland Institute and the American Legislative Exchange Council, or ALEC, have been looking to repeal state renewable energy standard policies since last October when ALEC’s board of directors adopted the model legislation — the Electricity Freedom Act — to roll back state standards.
Other states should expect to see ALEC and the Heartland Institute claim that renewable electricity standards raise power rates for consumers compared to states without clean energy requirements. That claim is false, however, as Richard Caperton, Director for Clean Energy Investment at the Center for American Progress demonstrated in a CAP issue brief last April.
Matt Kasper is a member of the Energy and Environmental Policy team at the Center for American Progress.
On February 28, the Kansas Senate voted 17–23 to defeat SB 82. The House also voted 63–59 to send HB 2241 to the Committee on Utilities and Telecommunications for additional deliberation. These votes came two days after the Topeka Capital-Journal reported that a lobbyist affiliated with Koch Industries had private talks with the leader of the House Energy and Environment Committee.