TOPEKA – The Kansas House overwhelmingly passed a bill that sheds the state’s renewable energy mandate in favor of a non-binding goal.
The proposal, which was unveiled by Gov. Sam Brownback earlier this week, is backed by free-market groups, which have previously pushed for a full repeal, and the wind industry, which has previously warned that eliminating the mandate would hamper the industry’s growth.
Instead of requiring the state’s utility companies to obtain 20 percent of their power from renewable sources by 2020, the state will set a non-binding goal to reach that level, under the provisions of SB 91. In addition, new wind energy projects will face a ten-year cap on a property tax exemption rather than the continuous exemption that existing projects enjoy.
By agreeing to these terms, wind energy producers will avoid an excise tax on wind energy production and a total elimination of the property tax break.
The bill passed by a vote of 107-11, but not before dissenters passionately aired their grievances.
The legislation was produced by private meetings between the Wind Coalition, Americans For Prosperity, the Kansas Chamber of Commerce and legislative leaders.
Rep. Annie Kuether, D-Topeka, criticized this process during the floor. “Meeting behind closed doors … with unelected people writing legislation that we’re now supposed to pass,” Kuether said.
Rep. Dennis Hedke, R-Wichita, who as House Energy chair was involved in the negotiations, defended the process. He said that closed door meetings between business leaders and lawmakers are normal. “This is nothing new,” he said.
As Kuether and Hedke sparred, Kimberly Svaty, lobbyist for the Wind Coalition, watched from the House gallery, where she sat with Mike Morgan, lobbyist for Koch Industries, and Mike O’Neal, president of the Kansas Chamber of Commerce.
Kuether highlighted Koch’s role in pushing for a repeal of the renewable energy mandate in recent years. She argued that the threat of an excise tax had been used to force the wind industry to accept a bill that primarily favored the other side. Kuether quipped that “the bullies on the school yard not only got the lunch money, they got lunch.”
Rep. Boog Highberger, D-Lawrence, compared the bill to a person pointing a gun to your head, demanding all your money and calling it a compromise when you hand it over to them.
Kuether said the state already obtains about 20 percent of its power from renewable sources, so making the mandate into a goal would be meaningless.
However, Svaty said that the fight over the mandate, known as the renewable portfolio standard, was no longer worth having.
“There has been a perpetual fight within the Legislature for four years over something that has now been met. We know that the RPS is not going to be increased in Kansas and we know that it won’t be decreased, and the constant fighting has created a market of instability,” Svaty said.
She said the questions about taxes also gave the industry incentive to compromise. She said that the 3.4 percent excise tax that was proposed this session would have cost a 100 megawatt wind producer $5.2 million annually.
“Kansas has a tremendous resource. We have a wonderful product. And we’re fighting over something over that’s already been achieved … if we can take that contentious issue off the table and get some stability on the tax side we can regrow our market,” she said.
Rep. Russ Jennings, R-Lakin, a moderate Republican who last year led the opposition to repealing the mandate, touted the bill as a compromise that works for all side.
“Pay no attention to the logos. Pay attention to the logic,” he said.
Jennings argued that the mandate also would act as a limit by discouraging utility companies from doing more than necessary, but they may surpass their goals. “Quite quickly we’ll be at 25 percent and perhaps in the not so distant future 30 percent,” he said.
The bill awaits final passage in the Senate – where it is expected to pass easily. Brownback has already indicated his intention to sign the bill when it comes to his desk.