Kansas Renewables Mandate Survives Yet Another Attack, But Is It Too Early To Celebrate?


Kansas Renewables Mandate Survives Yet Another Attack, But Is It Too Early To Celebrate? The gloves have come off in Kansas, where a band of legislators and several anti-mandate groups are pushing to repeal the state's renewable portfolio standard (RPS). Recently, the state Senate approved a measure to do away with the clean energy mandate, but the House ultimately rejected the effort. Nonetheless, this is not the first time Kansas' RPS has come under attack, nor will it likely be the last.

Established in 2009, the RPS requires Kansas utilities to source 20% of their electricity from renewables by 2020, and wind industry stakeholders consider the House's vote to protect the mandate a noteworthy victory for the sector.

Frank Costanza, executive vice president of TradeWind Energy Inc., says an RPS repeal would be "short sighted" and drive away business to nearby states. The Kansas-based developer has installed about 700 MW of wind in the state and has several other projects in development.

"A repeal of the RPS would send a chilling signal to the industry – not just developers – that Kansas doesn't support the business," says Costanza.

Kimberly Svaty, director of Kansas for The Wind Coalition, agrees. "The Kansas House sent a strong message that retaining a stable policy environment for all industries is critical to the future growth of the Kansas economy," she says. "Kansas has been a leader in renewable energy development as well as jobs from associated manufacturing, and the vote by Kansas House members was recognition of our role."

According to the American Wind Energy Association (AWEA), Kansas has about 3 GW of wind power installed and ranks eighth in the U.S. for capacity. In 2012 alone, the state's wind mix doubled by installing approximately 1.4 GW.

Furthermore, Kansas has a lot of potential, boasting the second highest wind resource in the nation and the ability to meet over 90 times the state's current energy needs with wind power.

"We see a lot of our wind being exported to states well beyond Kansas, particularly to the southeast," explains Svaty. "Around 45 percent of our installed wind is exported, so I think that speaks to how good of a commodity we have to market."

The state is also home to Siemens' nacelle assembly plant in Hutchinson, and AWEA ranks Kansas sixth for the number of wind-related jobs, with the state supporting between 3,000 and 4,000 jobs last year. In addition, the association says Kansas wind represents $5.5 billion in capital investment and over $7.9 million in annual land lease payments.

Déjà vu
In 2012 and 2013, the Kansas RPS survived separate legislative assaults, but the main arguments have basically stayed the same: RPS opponents claim the mandate is uncalled for and leads to higher electricity prices, while proponents maintain that the law helps boost the state's economy and diversify its energy portfolio.

However, Britton Gibson, an energy attorney at law firm Polsinelli PC, says this newest challenge against the mandate was swifter and more aggressive than in 2013.

For example, Gibson notes that there were many opportunities for dialogue and debate, including public comment and testimony, last year. The legislation had also gone through multiple iterations at the committee level.

This year, on the other hand, he says that after the repeal passed out of the Senate, the anti-RPS language was attached to a House bill in a way that avoided going through hearings or votes in a committee.

Furthermore, last year's failed bill sought to weaken or cap the mandate, not eliminate the RPS completely. As Luke Hagedorn, another energy attorney at Polsinelli, says, this latest measure was "much more a hatchet than a scalpel."

Gibson and Svaty also note that the same conservative groups, including the American Legislative Exchange Council, the Heartland Institute and Americans for Prosperity (AFP), have renewed their anti-RPS push in Kansas this year. Gibson says AFP, in particular, has orchestrated a massive media blitz, having run a slew of television and radio attack ads against the mandate.

One video hosted on the group's site says the RPS limits sources of state electricity and has led to several rate hikes. "Like Obamacare," the ad says, "it's another government mandate we can't afford."

And that's a claim that anti-RPS groups and legislators keep making – that the mandate is costing Kansas ratepayers too much. "That argument makes a good sound bite, but it's factually incorrect," says Gibson. In 2013, for instance, RPS opponents often cited a report from the Beacon Hill Institute, yet Svaty charges that the study used a "formulaic system" not focused on local information and served as propaganda to repeal or alter the RPS.

However, studies from the Kansas Corporation Commission (KCC), which regulates utilities in the state, indicate that the RPS accounts for only a fraction of a cent of overall electricity rates. In fact, a recent KCC report determined the rate impact of renewable resources is about 0.21 cents/kWh, while the total retail electricity cost across the state is about 9.55 cents/kWh.

The anti-mandate groups aren't the only ones trying to get their message out to the public and lawmakers, though. Renewable energy advocates have led a large grassroots movement in Kansas, hosting round tables across the state and releasing reports of their own.

The Wind Coalition and the Climate and Energy Project announced poll results in January showing that the majority of Kansans support renewable energy development and the RPS. The survey, which questioned 600 Kansas voters, found that 91% of respondents strongly back renewables. There is also bipartisan support for the RPS, with 82% of Democrats, 73% of Republicans and 75% of Independents favoring the law. Perhaps most interesting, though, is that two-thirds of respondents would get behind boosting the RPS, even if it led to a $1 or $2 bill increase.

According to Svaty, the poll suggests that legislators against the RPS aren't necessarily in tune with what their constituents want.

"The support for renewable energy has only solidified and strengthened in the five years since we last did a poll about clean energy policy," she says. "I think making that information known to lawmakers and Kansans across the state is really important. We may not have the money or the resources of some outside groups that do large media marketing campaigns, but we do have the strength of public opinion on our side."

Low-hanging fruit
Citing a 2014 Polsinelli report, which was prepared in partnership with the Kansas Energy Information Network and takes into account KCC data, Gibson and Hagedorn say that all Kansas utilities have already met, or are on track to meet, their 2020 RPS requirements.

Therefore, with so little to go for the state to reach 20% renewables integration, why would Kansas legislators try to repeal the standard? Why would the anti-mandate groups lobby to kill it? In other words, what's the point?

Well, it appears that some of the legislators are simply against government requirements. According to an AP report, state Rep. Randy Garber, R-Sabetha, said in March, ‘I support wind energy. What I don't support is the mandate. I support choice, free choice.’

However, state Rep. Russ Jennings, R-Lakin, argued those seeking a repeal were "nothing more than folks who want to exercise political power. This is about wanting to have a win for the sake of having a win without considering the potential benefit all this has."

Gibson and Hagedorn suggest that Kansas is likely a big target for the RPS opposition groups because the state is "highly conservative" and, thus, politically ripe to embrace an anti-mandate mantra.

Kansas was the last of 29 states to pass an RPS, and it could become the first to eliminate its standard. Although legislators across the U.S. attempted to repeal their clean energy laws last year, none proved successful.

"I think the goal is to have a domino effect," says Hagedorn. "If you get the RPS repealed in one state, you open up that box, and it becomes more realistic for other states to take a hard look at their mandates."

What's next?
The Kansas RPS has so far survived each attack over the past three years, and Gibson considers the recent House decision to reject the repeal a major victory. Nevertheless, he cautions, "It's a little premature to say the RPS is safe for another year."

In fact, Svaty says, "It is expected that additional legislation to alter or repeal the Kansas RPS is forthcoming in the upcoming Veto Session beginning April 30, as well as in future legislative sessions."

According to a recent Topeka Capital-Journal report, RPS supporters are preparing for the next legislative assault. State Rep. Annie Kuether, D-Topeka, warned her fellow Democratic members that some lawmakers might try to attach an RPS repeal onto a net metering bill. ‘If the RPS goes on it, kill it,’ Kuether said. ‘Just like last time.’

Even if Kansas' mandate does make it through this year unscathed, though, Svaty acknowledges that the fight will likely continue.

"The wind industry could be playing defense for several more sessions, depending on the outcome of the 2014 and 2016 elections," she says.

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