Joshua Svaty: Free market has spoken on renewable energy

05/27/2014 6:42 AM

05/27/2014 6:42 AM

I became concerned during this past legislative session about the chorus line I was hearing from opponents of the renewable portfolio standard. “We like renewables,” Americans for Prosperity would superficially say. “We just don’t like that they were mandated.”

This “principled stand” was restated in the opening lines of a commentary by the elected architects of that Kansas opposition, Rep. Dennis Hedke, R-Wichita, and Sen. Forrest Knox, R-Altoona (“Renewable mandate driving up energy costs,” May 20 Opinion). As I had a front seat to the passage of the 2009 comprehensive energy legislation they mentioned, I thought I might try to illuminate a few things.

There were a lot of mandates in the 2009 energy bill. The legislation mandated that the Kansas Department of Health and Environment permit a coal-fired power plant in western Kansas. It mandated the size of that coal plant. It mandated that a certain portion of the coal come from Kansas, of all things. But the “market distortion” passed by the Legislature that Americans for Prosperity seems to have zeroed in on is the mandate that utilities provide a portion of their power from renewable sources.

When customers switch on their lights at home, there is no corresponding switch that asks: “Would you like your electricity to come from coal, wind, natural gas or nuclear?” Because electric utilities in Kansas have a defined service territory, Kansas electric customers cannot shop around for their utility provider – certainly not the type of power that serves their home.

That sort of monopoly on service encouraged the people of this state to heavily regulate, or “mandate,” nearly every layer of electric service. It is a mandate that utilities provide service. It is a mandate that they not cut off service to low-income individuals during peak heating/cooling months. It is a mandate that utilities use lowest-cost resource planning, and if they are not to use the lowest-cost power, that must be mandated, too.

These mandates have come from the closest thing constituting a free market in Kansas’ electric utility industry – public citizens’ voices through the political process. The mandates are laws and regulations that have been developed over time by our Legislature, enforced largely by the Kansas Corporation Commission.

The Legislature distorts the market all the time, in economic areas that aren’t even monopolies. We subsidized Wichita’s airport. That’s certainly a market distortion, but that is also a priority set by the people.

Isn’t that our right, in a self-governing society? What sort of a society would these opponents have us live in? An “econocracy,” in which we can’t do anything that isn’t supported by Americans for Prosperity’s bizarre definition of the free market?

When policymakers talk about distortions in the electric utility market, they are missing the point that is glaring them in the face: Because of its monopoly nature, the only free market in Kansas’ electric industry is the Legislature, where the people can come and express their interests.

Guess what? That “free market” has spoken. And spoken, and spoken again, repeatedly, saying that Kansans want a mix of their power coming from renewable sources.

Americans for Prosperity is watching that free market at work. At what point will AFP respect it?

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