State legislative attempts to weaken or repeal Kansas’ renewable energy standard would be a setback to businesses eager to broaden wind power production or a victory to politicians uneasy with requirements that utilities develop greener portfolios.
A law adopted in 2009 as part of a compromise between the Republican-led Legislature and Democratic Gov. Mark Parkinson breaking a regulatory deadlock over a state permit for a coal-fired power plant in southwest Kansas stipulated utilities must draw 10 percent of energy from renewable sources by 2011, 15 percent by 2016 and 20 percent by 2020.
Utility companies are progressing toward those objectives primarily by adding wind, but multiple lawsuits stalled the 895-megawatt Holcomb coal plant and triggered a court-ordered environmental review.
Rep. Dennis Hedke, chairman of the House Committee on Energy and Environmental Policy, said lack of progress on the coal plant prompted lawmakers to consider dumping the RPS or delaying targets two or four years. Some House and Senate members want to extract the state from meddling in oil, gas, nuclear, wind and solar businesses, he said.
“We want to do everything we can to allow market forces to dictate any infrastructure build out. We don’t want to mandate. We are an all-of-the-above state,” said Hedke, a geophysicist consultant for the oil and gas industry.
It is unclear how Gov. Sam Brownback would respond to overhaul of the RPS given his fierce and successful advocacy for congressional approval of a federal tax credit for wind energy companies. He touts $3 billion invested in Kansas wind energy during 2012, which moved the state to third place in production behind Texas and California.
“The discussion on RPS is about jobs and growing the Kansas economy,” said Kimberly Svaty, who represents the Wind Coalition’s turbine manufacturers, public interest activists and wind farm developers, owners and operators. “We have proven in three short years that we are an industry which delivers to Kansans.”
Svaty said Kansas utilities complied with the 10 percent target on time and need about 100 megawatts in the next four years to attain the 15 percent level. She said compliance with the RPS, according to the Kansas Corporation Commission, raised electricity rates by no more than 1.7 percent.
Rep. Charlotte O’Hara, an Overland Park Republican, said she had anecdotal evidence from her husband the RPS was responsible for increases in energy costs for Kansans.
“Our renewable standards are a failure,” O’Hara said. “Repeal the RPS and be free from these crippling energy mandates.”
Mark Schreiber, public affairs director at Westar Energy, said the company had been one of the state’s leading builders and buyers of renewable energy since 2008. The rate impact of the RPS has been “relatively small” compared to the cost of complying with federal environmental regulations on old coal plants, he said.
He said establishing the RPS was good public policy in 2009, but extending compliance deadlines would give Westar flexibility in managing a $1.6 billion retrofit of coal stations.
Sen. Rob Olson, R-Olathe, said he was uneasy with the state committing itself so heavily to wind-driven turbines because they weren’t as reliable as coal, natural gas or nuclear fuels.
“It’s a fact. Wind doesn’t blow all the time. That’s my biggest problem with wind,” Olson said.
Holly Carias, director of NextEra Energy Resources in Juno Beach, Fla., said the Fortune 200 company remained bullish on Kansas wind as it manages a portfolio making it the nation’s largest consumer of natural gas, third largest nuclear and solar generator and No. 1 owner and operator of wind systems.
The company’s investment of $635 million in Kansas wind projects recognizes the state’s power alley is among the country’s best in terms of consistency. There is research indicating a combination of wind and solar, perhaps located in southwest Kansas, can help bridge gaps, she said.
Carias said state legislation undermining the RPS in Kansas would transform the equation.
“The existing renewable energy standard works,” Carias said. “It has driven growth in the state. Kansas’ status as a national leader in wind will be significantly impacted if this amendment passes.”
None of the more than 30 states with an RPS have backtracked on the policy, said Matt Riley, chief executive officer of Infinity Wind Power.
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