Clean energy advocates skeptical, cautious about retail choice bills in Nebraska and Kansas

Source: By Karen Uhlenhuth, Midwest Energy News • Posted: Wednesday, March 1, 2017

Bills before the Nebraska and Kansas legislatures to allow electricity customers to choose their power provider are being viewed with caution, and a little skepticism, by clean-energy promoters in the two states.

A Houston-based energy developer with Nebraska ties, Gary Aksamit, appears to be the driving force behind the legislation.

Aksamit argues that a freer energy marketplace could mean more access to renewable sources. However, such a fundamental remaking of the electricity marketplace has people concerned about possible unintended consequences.

The change would be particularly dramatic in Nebraska, where electricity is provided by not-for-profit public power districts.

A legislative committee hearing on two bills earlier this month week drew a large crowd that mostly protested any thought of impinging on the state’s public power districts. The public power providers have no in-state competition and are run by boards of directors, generally chosen by the utility’s customers.

In Kansas, it appears that the bills are unlikely to get a committee hearing. However, they were introduced into a committee that allows debate until the end of the session.

Michael Matherson, a partner and spokesman for Aksamit, predicted that retail choice would bring much more wind power to Nebraska.

“Look at Texas, a retail choice state,” Matherson said. “The amount of wind there is phenomenal.” Currently, “public power decides how much wind is built in Nebraska.” If retail choice comes to Nebraska, he said, “the customer is going to decide that.”

Aksamit’s company, Aksamit Resource Management, has taken steps toward developing at least three wind farms in the state.

Ken Winston, who represents both Bold Alliance and the Sierra Club before the Nebraska legislature, said that there “may be some merit” in the ideas in the choice bill and an accompanying bill that would require utilities to provide ratepayers more details on specific charges for generation, transmission, distribution, capacity and administration.

“There’s the potential of some benefits,” he said. “Could we get more renewable energy if there was retail competition? We’d be interested in looking at whether this would help to foster that.”

However, Winston shares the concerns expressed by many Nebraskans that opening up the market might lead to higher bills for some customers and “cherry picking” by new providers.

“I’ve seen some studies that indicate that competition can lead to companies sweeping in and taking the more-profitable customers and leaving the lower-income or residential customers to other entities,” he said.

‘Nebraska has to come into the present’

Former Nebraska state Sen. Ken Haar, who remains deeply involved in energy issues, said that introducing competition to public-power districts “has to be approached carefully,” but could lead to more renewable generation.

Public power “locks us into the past,” he said. “Nebraska has to come into the present.” He pointed out that a lack of renewable energy was a factor in Google’s decision a couple years ago to add on to its data center in Council Bluffs, Iowa rather than build in Omaha. About one-third of Iowa’s power is generated by wind turbines, and plans are in the works to roughly double that.

“We have to be willing to allow renewable energy to exist within the state,” Haar said.

Allowing other companies to enter Nebraska’s energy marketplace, Haar said, “may be a way to shake up the cage.”

In Kansas, Zack Pistora, who represents the Sierra Club before the legislature, said he is “very interested in exploring the conversation because I think it could have some benefits.”

Although the utilities serving Kansas have invested significantly in renewables – especially wind energy – Pistora said retail competition “would provide for some niche electric utilities to come through and say, ‘Hey, maybe I can’t provide as much (power) as Westar, but I can provide your neighborhood or city with 100 percent clean renewable energy, maybe through solar or contracted wind.’”

The retail-choice bills have plenty of skeptics, however, in both Nebraska and Kansas.

Duane Hovorka was involved recently in founding Clean Energy Nebraska, a network of organizations working for more renewable energy in the state. He’s hesitant to upset public power, which he believes has served the state well and has even delivered a reasonable amount of renewable energy in the past few years.

The Lincoln Electric System now derives about 49 percent of its power from renewables. The Omaha Public Power District is ramping up from 16 percent in 2016 to an anticipated 25 percent this year and 30 percent in 2018.

However, the Nebraska Public Power District, which supplies most of rural Nebraska, has been more reluctant to embrace wind and solar generation. About 9 percent of its power in 2016 came from wind purchases, and another 9 percent from hydropower.

“We don’t think (LB) 660 is really going to help move us any faster towards renewables,” Hovorka said. “What it would do is allow private utilities to come in the state and cherry-pick some of the best customers. That could impact (the utility’s) finances in a way that would make it more difficult to make new investments.”

And Hovorka pointed out that nothing in the bill would require new power vendors to provide wind or solar power. He believes they would sell “not necessarily renewable energy, but the cheapest energy they can get.”

John Hansen, president of the Nebraska Farmers Union, called it “a false construct to say that to get more renewable power, you need to throw public power under the bus. This sets the whole effort for more renewable power backwards.”

Questions about bill backer

As the chairman of the non-profit Americans for Electricity Choice, Aksamit has been leading the campaign for a more open electricity marketplace in Nebraska and Kansas.

Despite the widespread outcry against the current attempt to bring retail competition to Nebraska, Matherson observed that Nebraska’s three major public power districts voluntarily entered into a competitive marketplace when they chose to begin buying and selling power through the Southwest Power Pool in 2009.

Nebraska’s public power districts lost more of their monopoly power a year ago when the legislature passed a law terminating the districts’ prerogative to take control of any renewable-energy source developed by a private entity.

A third bill supported by Aksamit during the current session would expand on last year’s change. The public power districts no longer would be permitted to take ownership of any type of generation developed by someone else.

Aksamit Resource Management has been working on developing at least three wind farms in Nebraska. The company has obtained approval from the Federal Energy Regulatory Commission to collect the production tax credit and to proceed with development, according to Tim Texel, executive director and general counsel for the Nebraska Power Review Board. However, Texel said, there are no turbines on the horizon.

“It has seemed like it’s taken a while,” he said. “He has waited longer than most (developers) I’m familiar with.”

A clean-energy advocate in Kansas said she wants more renewables there, especially for the many large corporations with sustainable-energy policies. But overhauling the regulated system isn’t what she had in mind.

“We were actually looking for something that would work with the utilities,” said Dorothy Barnett, executive director of the Climate+Energy Project. “This looks to be total energy deregulation, the Texas model….just a wide-open deregulated market. We don’t think we need to go as far as complete deregulation to get what businesses are looking for.”

She questioned whether Aksamit is in a position to bring wind energy to Kansas.

“He has a lot of projects that are under development, and it seems they’ve been under development since I first heard of him, which was six years ago.”

Furthermore, she’s not certain what type of generation he’s interested in bringing to market. Last fall, according to Barnett, Aksamit addressed a meeting of the Kansas Independent Oil and Gas Association. She said he spoke on the topic of why deregulation “is the right thing for oil and gas.”

“I am sometimes skeptical of people who play both sides of the aisle,” she said.

Asked if Aksamit is interested in building a natural gas-fired power plant in Nebraska, Matherson said, “If the opportunity arose where it was economically viable, absolutely.”