Republicans may have gained enough seats in the Kansas House to end the state’s renewable energy standard, and activists on both sides of the issue are preparing for a fight in the next legislative session.
The policy, known as the renewable portfolio standard, requires utility companies to get 20 percent of their power from renewable sources by 2020. The standard was passed in 2009 as part of a compromise that included building a coal-fired plant in Holcomb, a project that has not developed because of federal regulations.
Supporters say the standard has been critical for developing the burgeoning wind energy industry in Kansas and that scuttling it would stall growth.
Opponents say the standard will lead to electric rate increases for consumers and that renewable energy should compete with fossil fuels in the free market rather than be mandated by the state.
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A bill to repeal the standard sailed through the Kansas Senate last year but was defeated 77-44 in the House. A vote two months later to gradually phase out the standard by 2021 was much closer. It lost 63-60.
The constitutional majority required to pass a bill in the House is 63 votes.
Two things have happened that give this bill a better shot of passing this time around.
First, on the campaign trail, Gov. Sam Brownback voiced support for phasing out the standard after mostly staying out of the debate during the session. He said he wanted a compromise that both sides could accept but expressed support for phasing out the policy over a number of years.
Brownback’s openness “would certainly imply there’s some reason to revisit the subject matter,” said Rep. Dennis Hedke, R-Wichita, who chairs the Energy and Environment Committee and opposes the standard.
Second, Republicans will hold 97 legislative seats next year compared with 92 this year, an increase that reflects election victories and Rep. Jan Pauls, R-Hutchinson, switching parties. Pauls voted “no” on the phase-out bill earlier this year.
Rep. Don Hineman, R-Dighton, a moderate who supports the standard, said the larger Republican caucus and the governor’s statements change the dynamics. In previous sessions, he and other moderates teamed with Democrats to defeat the repeal. That could be more difficult now.
Hineman, who hails from Lane County, said the policy “truly does mean jobs and economic activity and economic growth in western Kansas.”
House Speaker Ray Merrick’s office did not want to comment on the issue.
Hedke said the Legislature will likely revisit both the standard and a property tax credit for renewable energy sources in the next session.
Getting rid of either policy could have a negative impact on the development of the wind industry in the state, said Kimberly Svaty, a spokeswoman for the Wind Coalition.
“Having the second-best wind resource in the U.S. is very attractive to wind developers but does not alone secure future investment,” Svaty said in an e-mail. “Our neighboring states offer a similar wind product and more incentives than Kansas.
“We must be able to compete for these developments which are worth hundreds of millions of dollars. Our current property tax exemption and RPS policy are invaluable tools in keeping Kansas in the game to compete for greater investment in our state.”
Hineman said that utility companies are already meeting and surpassing the benchmark to get 15 percent of energy from renewable sources by 2015.
“They’re there. So repealing it has no immediate practical effect, but it sends a very negative message to the business community nationwide,” Hineman said.
But Hedke and many other conservatives remain unconvinced.
He said he opposes the standard for two reasons.
“One, price escalation, which will happen – there’s no doubt in my mind,” he said. He also questioned the ability of wind and other renewable sources to meet the state’s energy needs as utility companies are mandated to rely upon them to a larger extent.
“Grid reliability is going to be a really difficult issue when we start trying to micromanage and displace very viable and reliable fossil fuel, coal-based energy in the region and try to force renewables in a place where they can’t just handle the reliability,” Hedke said.
Hedke is a geologist who serves as a consultant to the fossil fuel companies. He says that experience gives him expertise on energy issues; environmentalists say it calls into question his objectivity in assessing the reliability of renewable fuels.
Moti Rieber, an environmental activist, said the state’s inclusion in the Southwest Power Pool means that when wind in Kansas is too light to meet the state’s energy needs on a given day, wind from Oklahoma or Nebraska can fill the gap.
Rieber contends that efforts to repeal the standard would have been halted after previous defeats if not for support from Wichita-based Koch Industries.
“They’re an oil company. They don’t want the competition,” Rieber said. “I don’t know what Charles Koch believes in his heart of hearts, but they don’t want this thing to exist, and that’s their entire goal.
“It’s just that they have so much influence in the Legislature, and they have so much influence financially within the state that they just keep the issue going,” said Rieber, a rabbi who leads Kansas Interfaith Power and Light, an interreligious group that promotes environmental stewardship. “Their arguments are not good arguments. All they have going for them is the money.”
The two groups that spearheaded efforts to pass a repeal during the previous session were the Kansas Chamber of Commerce and Americans for Prosperity. Koch is a chamber member, and David Koch is chairman of Americans for Prosperity’s foundation.
“Koch Industries was a member of a broad coalition opposed to the state’s RPS,” Mark Nichols, vice president of government and public affairs for Koch Companies Public Sector, wrote in an October e-mail. “We have a long history of opposing state and federal mandates and subsidies. …We believe in a free market where consumers, not the government, determine winners and losers by exercising decisions on what products to buy.”
Nichols noted that despite its opposition to the standard, Koch Industries has investments in biofuels, “because we believe they can compete in the marketplace and serve as an important fuel of the future based on their own free market merits.”
“The marketplace should be allowed to innovate and determine its own path forward,” he added.
In addition to its activism at the state level, Americans for Prosperity is fighting efforts by President Obama to retroactively extend a federal production tax credit for wind energy.
“Again, it’s not that we’re anti-wind, it’s that we’re anti-government providing the subsidy to artificially control a cost, the government putting its finger in the marketplace,” said Jeff Glendening, Americans for Prosperity’s state director.
The expiration of the production tax credit at the federal level was actually one of the main reasons Sen. Forrest Knox, R-Altoona, and other conservatives said the state should eliminate the standard, contending that the loss of the federal subsidy would increase the cost of wind energy exponentially.