Full Kansas Senate votes to repeal renewable standards

Source: By Andy Marso, Topeka-Capital Journal • Posted: Wednesday, March 26, 2014

Chamber gives approval to bill scuttling energy standards enacted in 2009
The Senate passed a bill 25-15 Tuesday to repeal the renewable energy standards enacted in 2009.

The mandate, known as the Renewable Portfolio Standards, require the state’s utility companies to get 20 percent of their electricity from renewable sources by 2020. It has been credited for helping spur a wind boom in the state, but conservative Republican opponents say it is a distortion of the free market that will drive up costs.

Citing an article in Forbes, Sen. Forrest Knox, R-Altoona, told his colleagues that a federal tax credit has subsidized wind energy and kept rates artificially low, but the cost of wind energy is poised to skyrocket after the credit expired last year.

“Wind energy in Kansas is robust and is doing very well,” Knox said. “Federal money has paid for it, and federal money is going away.”

Knox said Kansas has likely seen its last wind farm built without the credit.

During a committee hearing, Knox asked a representative from EDP Renewables, which is building a wind farm in his district, if the company would still be doing so without the federal tax credit.

That representative, Rorik Peterson, said at the time that he was unable to speculate because the company began the project based on condition at the time.

After speaking with other members of the company, Peterson said in a phone interview Monday that the elimination of the credit wouldn’t have precluded the company from building the wind farm.

“Even without the production tax credit, wind in Kansas is still competitive,” Peterson said.

Peterson said without the tax credit the company may have had to negotiate a different 20-year sales rate with Kansas City Power and Light, but it wouldn’t necessarily have had to be dramatically different for the project to still be lucrative.

Knox said he disagrees with Kansas Corporation Commission estimates that show the renewable standards costing ratepayers less than 2 percent, but said even using those numbers, it costs him $50 a year.

He said the burden is far higher on businesses.

“If I’m paying $50, they’re paying $500 or $5,000,” Knox said.

Sen. Larry Powell, R-Garden City, said there are hidden costs to wind that are passed on, including fines incurred when turbines kill endangered birds.

“I think our constituents need the cheapest energy possible,” Powell said.

Sen. Marci Francisco, D-Lawrence, said the latest KCC figures say renewable energy costs are going down while supplying more of the state’s electricity at peak times.

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

Peterson’s company was one of several energy developers who testified against repealing the standards in committee, along with local chambers of commerce.

Sen. Tom Hawk, D-Manhattan, read off some of the testimony on the Senate floor.

“I counted four proponents for the bill, but 23 opponents,” Hawk said.

Sen. Anthony Hensley, D-Topeka, urged the Senate to not even take up the bill, Tuesday, noting that a survey showed widespread support for the standards and Gov. Sam Brownback has voiced support for the wind energy.

But Americans For Prosperity has called repealing the standards one of its top priorities this session and bankrolled a controversial statewide radio and TV ad blitz attempting to tie the standards to former Gov. Kathleen Sebelius and the federal health care reform.

Several senators who voted to repeal the standards said they did so because it was time for the alternative energy companies to “stand on their own two feet.”

The Senate also passed 35-4 Tuesday a bill expanding the Promoting Employment Across Kansas program, which gives subsidies to specific companies that relocate to, or expand within, Kansas.

Substitute for House Bill 2430 would allow companies that signed up for PEAK before 2013 to request a two-year extension of their benefits, which are capped at 10 years.

The rationale for extension is that PEAK companies get to keep employee state income tax withholding and tax cuts enacted in 2012 and 2013 have lessened the value of the subsidy packages they were promised.

The Senate attached an amendment requiring the Secretary of Revenue to sign off on PEAK deals along with the Secretary of Commerce.