Fight over state renewable energy standards renewed in Kansas Senate committee

Source: By Trevor Graff, KHI News Service • Posted: Tuesday, March 25, 2014

TOPEKA — A fight over state standards for renewable energy generation has returned to the Kansas Senate.

The so-called Renewable Portfolio Standards were set in place in 2009 as part of a deal for Kansas to issue a construction permit for a Sunflower Electric Cooperative coal-fired power plant near Holcomb.

But they have pitted free-market conservatives against the industry.

The two sides met in a Tuesday hearing on Senate Bill 433, which would repeal the standards that require utility companies to show a renewable energy generation capacity of 15 percent by 2016, and at least 20 percent by 2024.

Opponents said repealing the standards would send a negative signal to wind energy companies looking to invest in the state. Kansas ranks fifth among states for wind energy-related jobs with more than 4,000 reported and 1,729 turbines installed, according to industry group numbers. Of the electricity produced in Kansas, 19.4 percent was from wind generation in 2013, according to the American Wind Energy Association.

“The RPS (Renewable Portfolio Standards) is a policy statement that the Kansas Legislature supports jobs and investments in this industry,” said Kimberly Svaty, public policy director for the Wind Coalition. “That’s what RPS is. It is not a cost driver. We have four years of reports from the Kansas Corporation Commission, all of which reiterate the cost of RPS has been between zero and 1.7 percent.”

According to American Wind Energy Association statistics, wind energy companies have spent more than $5 billion in capital investment in Kansas.

But those supporting repeal of the standards say it is more than just a matter of electricity bills. Spokespersons for Americans for Prosperity and the Kansas Chamber of Commerce said it also was a matter of a policymakers trying to pick winners and losers in the energy market.

“You cannot test the RPS up against the principles of the free market and against the principles of limited government and see it pass,” said Jeff Glendening, state director for the Kansas Chapter of Americans for Prosperity. “It is not a free market idea.”

The bill’s supporters said the wind industry doesn’t need state help but should stand on its own in competition with other sources of electrical generation.

Congress allowed the wind industries production tax credit to expire at the end of 2013.

Kansas Chamber of Commerce President Mike O’Neal said the industry was strong enough to stand on its own in the free market.

“We think that wind has gotten to the point where they should be a welcome partner and we can take the training wheels off,” O’Neal said. “We want to avoid picking winners and losers.”

But Sen. Marci Francisco, a Lawrence Democrat, noted that the state’s electric utility companies operate mostly as regulated monopolies under state law and the Kansas Corporation Commission.

“My understanding is that a free market is not what we have in terms of electricity production,” Francisco said. “They (consumers) don’t have a choice of electricity provider. When people purchase a car they may be interested in the mileage, but they also might be concerned about what it looks like. Some people would like to be able to make a choice to be using a different energy source.”

‘Where the wind blows’

The bill’s supporters said the state has certain natural advantages for wind generation that will make it attractive regardless.

According to the American Wind Energy Association, Kansas has the second largest potential for wind development in the United States.

“Wind projects will go where the wind blows,” O’Neal said. “It just makes sense. They’re not here because of the renewable portfolio standard. If the renewable portfolio standard would go away, the wind wouldn’t quit blowing and the appetite for renewable energy would not go away.”

Frank Costanza, Executive Vice President of TradeWind Energy responds to Sen. Robert Olson, an Olathe Republican, who questioned the viability of the Kanas wind energy and reinforced the industry’s need for a policy such as the Renewable Portfolio Standard.

Frank Costanza, executive vice president of TradeWind Energy, a Lenexa-based renewable energy development company, disagreed.

“I can tell you for a fact the wind that was developed after 2009, after the RPS was passed, was simply because you sent the signal that you supported it and there was a stable policy to support the advancement of wind,” he told members of the Senate Utilities Committee.

Costanza said it isn’t just a signal to the wind industry, but also a signal to large companies with a focus on sustainable production.

“We’re called on a regular basis by major companies that have passed their own policies that they want sustainable renewable energy as part of their energy mix for their businesses,” Costanza said.

Those companies include Wal-mart, Google, Sprint and several others, he said.

Sen. Pat Apple, the Louisburg Republican that chairs the committee, said the panel would vote on the bill Thursday.