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Feb. 5, 2013
TOPEKA Representatives of large, wind energy companies doing business in Kansas said today that proposed legislation to roll back the state’s renewable energy standards could stall the industry’s momentum in the state.
Utilities and alternative energy companies invested more than $3 billion in Kansas wind projects in 2012. And by the end of this year, the total amount invested in Kansas wind projects since 2001 is expected to climb to $7 billion. Wind farms have netted Kansas landowners $13 million in annual payments and created 13,000 jobs, the industry spokespersons said.
A state law that took effect in 2009 helped spur the development, they said. The law requires Kansas utilities to generate increasing amounts of power from renewable sources, reaching 20 percent of total output by 2020.
Bills under consideration in both the House and Senate would relax those standards. Senate Bill 82 would give utilities until 2024 to meet the 20 percent requirement and allow state regulators to waive the requirement for “good cause.”
Matt Riley, chief executive officer Infinity Wind Power, a California-based company, told members of the Senate Utilities Committee on Tuesday that backing away from the standards would send a strong negative message to the industry.
“That would send a shockwave through our industry saying ‘thank you very much for the $3 billion investment last year, but you’re not welcome here anymore,’” Riley said.
Infinity operates two wind farms in southwest Kansas. It sells the power produced at them to Westar Energy and the Sunflower Electric Power Corp. The company currently is investing in two more large projects designed to ship Kansas wind power to other states once new transmission lines are built.
But Riley said policy changes like those being considered by the Legislature could cause his company to re-think its plans.
“Although Kansas has been a state of preference for Infinity, the surrounding states of Oklahoma, Texas, Nebraska, Missouri and Iowa, to name a few, are poised to take advantage of an opportunity should Kansas present it,” he said.
Holly Carias is director of wind development for NextEra Energy Inc., a Florida company that has invested $635 million in Kansas wind projects. She said the renewable energy standards signed into law by former Democratic Gov. Mark Parkinson helped make Kansas one of the leading wind energy states in the nation, trailing only Texas and California in megawatt capacity installed.
“The existing renewable energy standard works,” she said. “It has driven growth in the state.”
Dave Trabert, president of the Kansas Policy Institute, a conservative think tank that advocates for lower taxes and smaller government, is expected to testify Wednesday in favor of eliminating the renewable standards.
“We have no objection to production of renewable energy,” Trabert said in written testimony distributed to committee members on Tuesday. “Our objection is to government intervention that forces utility companies to purchase more expensive renewable energy and pass those costs on to consumers.”
The policy institute’s position mirrors that of the American Legislative Exchange Council, a nonprofit conservative group that promotes free markets and limited government. It has made repealing renewable energy standards one of its top priorities nationally. ALEC has generated controversy by recruiting state legislators to work alongside its corporate members to craft model legislation. Kansas Senate President Susan Wagle, a Wichita Republican, and House Speaker Ray Merrick, a Stillwell Republican, both serve on ALEC's board of directors.
Carias said the wind energy her company produces for Kansas utilities is not any more expensive than the power the companies produce from their own generating units using coal and natural gas. But Trabert said a KPI study done with help from researchers at the Beacon Hill Institute at Suffolk University indicated that the renewable standards could increase the cost of electricity in Kansas by 45 percent by 2020.
Former Kansas Senate President Dave Kerr also testified against the bill. He said he was skeptical of the KPI projections based on his experience as the chairman of the board for a Hutchinson company that produces ethanol.
“I have good reason to watch natural gas prices,” said Kerr, who headed the Hutchinson Chamber of Commerce after leaving the Senate. “Natural gas prices fluctuate. When somebody gives you an estimate that says wind prices are going to be far higher than natural gas, have they really given you a realistic projection of what natural gas could be?”
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