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Senate panel advances bill to repeal renewable energy standards

  • Eagle Topeka bureau
  • Published Thursday, March 20, 2014, at 7:41 p.m.

— Supporters of wind energy say the industry is under attack by the Legislature, pointing to a bill that would eliminate renewable energy standards for utility companies as evidence.

The Senate Utilities Committee approved a bill on Thursday that would repeal the state’s renewable portfolio standards, better known as RPS to supporters and critics. The standards, passed in 2009, mandate that electricity suppliers get 20 percent of their energy from renewable sources by 2020.

The committee took the contents of Senate Bill 433 and stuck it into House Bill 2014, a bill that passed the House but is completely unrelated to energy – before Thursday it was a bill to revoke inheritance rights from ex-spouses.

Supporters of the RPS repeal say that the government mandate is unneeded and that removing it will not hamper growth of the wind industry.

“It’s not needed anymore,” said Mike O’Neal, president of the Kansas Chamber of Commerce, which supported repealing the standards at a hearing earlier this month. “I’d make an argument that it never was needed.”

The RPS statute requires that utility companies get 15 percent of their energy from renewable sources by 2015, and O’Neal said they’ve already reached that point.

“We’re there,” he said. “Time to take the training wheels off. We don’t need the RPS anymore.”

Kimberly Svaty, a spokeswoman for the Wind Coalition, said that the repeal and other legislation threaten to destabilize the wind industry in Kansas and deter new investment in wind farms.

Svaty called the repeal – and another Senate bill that would cap the number of years wind farms could receive property tax exemptions – an attack on the wind industry.

“To be honest, I don’t know why there’s an attempt to go after the wind industry,” she said. “We created $8 billion of new investment and 13,000 jobs.”

But Sen. Pat Apple, R-Louisburg, chairman of the committee which approved the bill, said the legislation is not designed as an attack on the wind industry, but is meant to protect Kansans from higher electric bills.

“I think everyone’s concerned about higher electric rates,” Apple said.

He said that production tax credits wind producers receive from the federal government have not been renewed, and so it would be foolish for the state to create an incentive for wind if the cost could potentially increase.

“We don’t know what that impact on rates will be, so from my perspective this all about trying to provide some protection to the rate payers,” Apple said.

Sen. Marci Francisco, D-Lawrence, said data the committee reviewed at Wednesday’s hearing showed the cost argument had been overstated. She also noted that business owners and county officials from around the state told the committee about the importance the RPS plays in economic development.

“We heard that taking away the RPS puts a barrier to attracting firms where they’re valuing green energy, where they’re valuing the future,” Francisco said.

O’Neal argued the repeal won’t harm the growth of wind energy.

“They’re going to come where the wind blows,” he said. “They’re not going to go where the wind doesn’t blow.

“Depending on who you talk to we’re either the second- or third-most wind-rich state in the country.”

But the repeal could send a message to investors that Kansas – unlike other states – is unfriendly to renewable energy, according to Moti Rieber.

Rieber is a rabbi who leads Kansas Interfaith Power and Light, a group of activists from many faiths who call for good stewardship of the environment. He noted that renewable energy helped attract the Mars Company to open a facility in Topeka.

“We’d be taking the one major signal, or one major policy that we have, and taking it off the table,” Rieber said.

Rieber argued that the RPS creates economic development for the state of Kansas without a cost to the state budget. He also disputed the claims of Kansas Chamber of Commerce and Americans for Prosperity that the mandate interferes with the free market.

“There is no such thing as a free market in energy. … It’s a monopoly provider with a set rate of return. The free market does not enter into it,” Rieber said.

Another bill that critics saw as anti-wind got less traction this week. Senate Bill 435 would have capped property tax exemptions for renewable energy sources at 10 years.

Karin Brownlee, former Secretary of Labor, argued that the bill, as written, would have applied retroactively, meaning wind producers who have already enjoyed the exemption for more than 10 years – like NextEra Energy Resources – would lose their tax exemption.

Sen. Les Donovan, R-Wichita, said that the bill was not intended to be retroactive, but Brownlee did not accept his explanation.

“Because of the words written on the page in black and white, we read this as being retroactive,” Brownlee said.

“And you all would have on your record that you passed a retroactive tax increase and that is not business friendly.”

Donovan closed the hearing shortly after that and said the committee would not act on the bill for the time being.

“This is too big an issue to act hastily on,” Donovan said. “I understand that.

“And I would not want to change the goal posts for somebody that’s in the process of negotiating a deal and they already figured out they’re going to be tax exempt.”

Reach Bryan Lowry at 785-296-3006 or blowry@wichitaeagle.com. Follow him on Twitter: @BryanLowry3.

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