Some Kansas environmental groups disappointed with clean energy compromise
Topeka ? A bill that does away with the state’s clean energy requirements for electric utilities and replaces them with a voluntary goal is now on its way to Republican Gov. Sam Brownback for his signature.
But even though the wind industry endorsed the bill as a reasonable compromise with free-market political groups that oppose the current standards, other environmental groups say they’re disappointed with the outcome.
“I do think that it is laughable that after the hundreds of millions of dollars spent trying to repeal it, we’re settling for a goal we’ve already met,” said Dorothy Barnett, director of the Hutchinson-based Climate and Energy Project, a group that advocates for renewable energy. “But it won’t stop industry from growing. Momentum is on our side.”
Senate Bill 91 passed both the House and Senate on Thursday, barely two weeks after it was introduced.
But it was the result of intense negotiations for weeks between the wind industry and a handful of powerful interest groups that have lobbied for years, without success until now, to repeal the current standards. Those groups included the Kansas Chamber, Americans for Prosperity and Wichita-based Koch Industries, a major oil and gas producer.
The bill strikes the state’s current requirement, known as a “renewable portfolio standard,” or RPS, which requires electric utilities to produce at least 20 percent of their power from renewable resources by 2020 and replaces it with a voluntary “goal.” It also reduces property tax exemptions for renewable energy projects to 10 years instead of the life of the project. Sens. Tom Holland and Marci Francisco and representatives Barbara Ballard, Boog Highberger and John Wilson, all Democrats, voted against the bill. Rep. Tom Sloan, a Republican, voted for it.
Other groups expressing disappointment in the compromise included the Kansas Sierra Club and Interfaith Power and Light, a faith-based environmental group based in Johnson County.
In a joint statement when the bill was unveiled, they said the current law had helped spur more than $8 billion of investment in renewable energy projects, either directly or indirectly creating more than 13,000 jobs.
In the past, groups opposing the RPS law had argued that it forced customers to pay higher rates for electricity. But a 2014 report by the Kansas Corporation Commission showed that of the 9.55 cents per kilowatt-hour that the average Kansas customer pays for electricity, only 0.21 cents could be attributed to the cost of renewable energy.
Since then, opponents have argued that the RPS law simply violates the principles of free-market economics, and the state should not interfere by telling electric utilities which energy sources they should prefer.
“We believe the free market is the best place to decide where energy comes from,” said Jeff Glendening, a lobbyist for Americans for Prosperity, when asked why the bill was introduced. “We believe that’s the most efficient, that consumers will benefit from a free market.”
“The Kansas Chamber supports a mix of energy sources, including wind, where demand is driven by a free market and not by mandates,” chamber CEO Mike O’Neal said when the negotiated deal was announced at a news conference May 4 in Brownback’s office.
“It really is true that Kansans stood up for the last four legislative sessions to support renewable energy,” Barnett said. “It’s been farmers, ranch owners, industries and (local) chambers of commerce who stepped up to the plate and let our legislators know how important renewable energy is to our economy. It helped the industry grow to get past the 20-percent goal.”
This year, the conservative groups came to the Legislature with a proposal to impose a 4.33 percent excise tax on the sale of renewable energy. That’s the same rate that oil and gas companies pay in severance tax in Kansas.
Kimberly Svaty, who lobbies for the wind industry and who helped negotiate Senate Bill 91, said such a tax could have driven some existing projects out of business because they had negotiated long-term sale agreements with utilities for rates that were based on the existing tax environment.
More importantly, though, she said the constant debates in the Legislature over whether to repeal the RPS law had shaken investor confidence, and wind project developers were already beginning to look elsewhere to locate projects, most notably Oklahoma and Nebraska.
But the other environmental groups said they don’t trust the Kansas Chamber or Americans for Prosperity to uphold their end of the bargain.
“We suspect they will get the policy piece they want — repeal of the RPS — and then turn around and claim some kind of deniability on the tax piece,” the groups said in the joint statement.
Barnett said her group would like for the state to set a higher goal for renewable energy production. But even if it doesn’t, she said, there will be other incentives for more renewable energy development.
That’s because the Environmental Protection Agency’s proposed Clean Power Plan, scheduled to be finalized July 1, will soon require states to adopt plans to reduce carbon emissions from power plants by as much as 30 percent.