New plan would end Kansas green energy mandate for utilities
Topeka ? Electric utilities would no longer be required to produce 20 percent of their electricity from renewable resources like wind energy, and renewable energy generators would no longer receive an indefinite property tax exemption under a bill unveiled in the Kansas Legislature Monday.
Instead, the state would have only a “goal” of reaching the 20 percent benchmark by 2020, even though most large utilities have already met that goal. And beginning in 2017, renewable generation projects would be eligible only for a 10-year property tax exemption.
That deal was described as a compromise among various business groups, including Koch Industries, the Kansas Chamber and Americans for Prosperity who have been pushing to repeal the state’s “renewable portfolio standards” altogether, and a coalition of wind energy businesses that wanted to preserve at least part of a state program aimed at encouraging development of renewable energy.
Kimberly Svaty, a lobbyist for the Wind Coalition, said legislative efforts over the last five years to undo the renewable energy standards altogether were starting to deter wind developers from considering doing business in Kansas.
“We started fielding phone calls from large investment banks, and when some of our developers started saying to us ‘Kansas is becoming an unstable place to do business,’ ‘we’re not attracted to Kansas,’ ‘we’ll probably look to other states because the resource is comparable there and we don’t have this constant back-and-forth going on,'” Svaty said.
But the deal quickly prompted sharp criticism from environmental groups and many Democrats who argued that the renewable standards and the property tax breaks have been instrumental in spurring more than $8 billion of investment in the state’s emerging wind industry.
“The instability has been caused by repeated attacks on legislation passed by this committee,” said Rep. Boog Highberger, D-Lawrence, who serves on the House Energy and Utilities Committee, which quickly endorsed the bill Monday. “In fact, we’re rewarding the people who are causing the instability.”
But Sen. Marci Francisco, of Lawrence, the ranking Democrat on the Senate Natural Resources Committee, issued a statement later in the day saying she supports the compromise.
“I appreciate the willingness of the members of the Wind Coalition to compromise on the issue of property taxes on wind development,” Francisco said. “A fair and stable tax structure can encourage these wind companies to increase their investments and go far beyond the state’s targeted goal.”
Kansas enacted the renewable energy standards in 2009 as a way to reduce carbon emissions from power plants. But some business groups became hostile toward the standards after the Kansas Department of Health and Environment, and later the U.S. Environmental Protection Agency, refused to approve a permit for a large new coal-fired power plant near Holcomb in southwest Kansas.
Last year, the Kansas Senate passed a bill to repeal those standards, but that bill failed to pass the House.
This year, two separate proposals were offered: one to sunset the standards on Jan. 1, 2016; and another to impose a 4.33 percent excise tax on electricity produced from wind turbines.
The deal announced Monday was unveiled during a news conference with Republican Gov. Sam Brownback, who called it a good compromise.
“I think they did a fabulous job working diligently in a nice Kansas fashion where you just kind of keep, pushing, keep pulling, keep working with people to try to get them together to have this agreement we’re able to announce today,” Brownback said.
“This is a balance that’s best for the state. It’s moving energy policy in the state that’s pro-free market” said Jeff Glendenning, a lobbyist for Americans for Prosperity, a conservative political group that was founded by Charles and David Koch, co-owners of Wichita-based Koch Industries.
Immediately after the news conference, the bill was formally introduced and approved as an amendment to another bill in the House Energy and Environment Committee.
Committee chairman Dennis Hedke, R-Wichita, said there would be no formal hearing on the bill since the committee has been holding hearings on the issue for the last five years.
That elicited harsh protests from others on the committee, including Rep. Tom Moxley, R-Council Grove, who called the process “the equivalent of a smoke-filled room with just a handful of people in it that are doing this work, and the broader public has not had any input.”
Rep. Annie Kuether, of Topeka, the ranking Democrat on the panel, also objected to the process.
“This was done behind closed doors,” Kuether said. “I don’t know how many of you on this committee were in that meeting. There wasn’t a single Democrat in that meeting. The press conference was held before we even started to do this. This is a done deal. How the heck do we do business in this place anyway?”
But Rep. John Whitmer, R-Wichita, said the process was no different from the drafting of any other amendment to any other bill.
“I appreciate the efforts that have gone in, the compromise, the time,” he said. “I know that both sides have spent a great deal of time and energy negotiating and working to put this together, and I for one appreciate those efforts.