Attacks on Clean Energy in Kansas

 Kansas Renewable Energy Standard Fight in 2014:

Fossil fuel interests worked to repeal the renewable energy standard through the entire legislative session in 2014, and were defeated six times in Kansas, including on the last day of the session. The Kansas House repeatedly rejected the bill (HB 2014) seeking to repeal the RES after it passed the Kansas Senate in March 2014.

Heartland Institute Pushes Flawed Analysis Attacking RES

The fossil fuel-funded Heartland Institute used flawed analysis to inflate the cost of renewable energy standards (RES), in an attempt to eliminate pro-clean energy laws in states across the country. Kansas’ renewable energy standard has not led to the huge increases in electricity prices claimed by Heartland Institute, but rather has fostered billions of dollars of investment in wind power and created thousands of jobs.

Heartland Institute’s James Taylor claimed that because electricity prices in Kansas have risen faster than the national average since 2009, the state’s RES is causing a spike in electricity prices. But Taylor ignored the fact that electricity prices change because of a number of different factors.

In reality, Kansas uses much less natural gas (see Kansas Electricity Profile Table 5) than the national average (see United States Electricity Profile Table 5).

Since 2009, the low price of natural gas due to the fracking boom in the United States led to a decreased rise in electricity rates around in country, especially in states that use natural gas for electricity generation. In 2010, Kansas used natural gas for only 4.8% of electricity generated and coal for 67.8%. Nationwide, the electric power industry used natural gas for 23.9% of electricity generated, which explains, in part, why Kansas saw a more dramatic increase in electricity rates than the rest of the country. Furthermore, from 2009-2011, the average cost of coal increased 7.5% in the United States, much faster than the 2.3% average electricity price increase cited by Taylor.

Kansas uses more coal for electricity generation, which accounts, in part, for the increased rise of electricity prices in the state as compared to the national average.

The American Wind Energy Association explained why utilities are raising rates in a blog post debunking Heartland Institute’s flawed analysis: “The cost of providing other forms of electricity to consumers has been increasing, and in Kansas, upgrades to aging plants have prompted Kansas City Power & Light to request rate increases. Westar Energy also sought rate increases for its customers to help finance its share of necessary upgrades to outdated facilities.”

Utility Data Provide True Picture of RES Impact

Utilities in Kansas have asked for electricity rate hikes, not to pay for the RES, but because of their need to upgrade or retrofit coal fired power plants, and build new transmission capacity.

According to the Kansas Corporation Commission (KCC), Kansas City Power & Light reported less than a 1% rate increase due to the RES in 2012, and WestarEnergy estimated a rate impact of 1.7%. In a 2013 report (.PDF) to Governor Sam Brownback and members of the state legislature, the Kansas Corporation Commission calculated the rate impact of the RES at about 0.16 cents per kWh of the approximately 9.2 cents per kWh retail electricity cost in 2012 across the state (or less than 2% of the revenue requirement while supplying more than 10% of generation capacity).

Finally, the KCC has submitted an annual report on each utility’s efforts to fulfill RES requirements. As of 2012, five of the six affected utilities had already produced a surplus of clean energy in meeting the requirement.

Fossil Fuel Interests Attack Clean Energy Law For Driving Investment, Jobs in Kansas

The American Legislative Exchange Council (ALEC), its fossil fuel membership, and affiliated front groups were behind the push to repeal RES in Kansas.

Koch Industries, a major fossil rule conglomerate that has interests in electricity markets through its coal and natural gas interests, pushed for RES repeal in Kansas through the Koch Brothers’ funded group, Americans for Prosperity, and the company’s lobbyists.

Americans for Prosperity Kansas (the astroturf group founded and funded by the Koch Brothers) hosted the Emerging Energy Issues Forum in partnership with Heartland Institute (another fossil fuel-funded front group) and the Kansas Chamber of Commerce in February 2014.

During the event, operatives representing Heartland Institute and others attacked both the RES law in Kansas and solar net metering. Representatives on the panel at the event also cited the Institute for Energy Research’s debunked “Spain green jobs study” (see IER on page 11) to claim that clean energy jobs result in other job losses. Americans for Prosperity has also launched a television advertising campaign, spending at least $300,000 to echo that the RES is causing electricity rate hikes.

Special interests pushing the anti-clean energy bill also created a front group in their effort to repeal the standard. The leader of Americans for Prosperity (AFP) Kansas admitted to contacting the group’s lawyer to set up a new front group, the Kansas Senior Consumer Alliance, after previously denying that there was any connection between AFP and the Senior group. AFP also teamed up with the Heartland Institute and the Kansas Chamber of Commerce to advocate for repeal.

Finally, the Kansas Chamber of Commerce, which counts many fossil fuel and utility interests as members, also advocated for repeal of the clean energy law. Kansas Chamber of Commerce counts numerous fossil fuel and utility interests as members, in addition to Koch Industries, which could have benefited from repeal of the RES:

  • Kansas Gas Service (part of ONE Gas)
  • Murfin Drilling Company
  • Black Hills Energy
  • TransCanada
  • Westar Energy
  • Kansas City Power & Light
  • Atmos Energy
  • CVR Energy
  • National Cooperative Refinery Association

The Chamber was ridiculed by the Red State Renewable Alliance for blaming rising rates on the RES, even though Kansas City Power & Light announced that purchasing 400 MW of wind would lower rates by $600 million over 20 years.

Utility interests and front groups attacking clean energy in Kansas are using disinformation to inflate the costs of clean energy and protect the fossil fuel status quo from competition. Cheap, clean energy poses a threat to the fossil fuel electricity sector, and Kansas’ renewable energy standard has spurred investment in the state’s clean energy economy, driving over $7 billion in investment since 2001. In total, more than 10,000 jobs have been created by the wind industry in Kansas, both directly and indirectly, according to a recent report studying the economic impact of wind energy in the state.

Kansas Net Metering Fight in 2014:

The Kansas Legislature considered taking up anti-solar net metering legislation (HB 2458) pushed by two major utilities: Westar Energy and Kansas City Power & Light. In the end, the legislature adopted a compromise that preserved net metering, handing a defeat to the American Legislative Exchange Council (ALEC), which sought to eliminate the policy.

The House Energy & Environment Committee originally passed an amended HB 2458 with language that would have made substantive, negative changes to solar net metering if passed by the state legislature. The proposed bill would have calculated any excess credits for electricity generation at the end of each month’s billing cycle and allowed utilities to pay solar customers generating excess electricity less than the retail rate of electricity.  Utilities would have then been able to turn around and sell the electricity to customer-generators neighbors at the retail rate, thereby generating revenue for the utility from the customer’s solar investment.

Anti-Solar Bill Pushed Through ALEC-Chaired Committee

The anti-solar bill follows model net metering policy approved during ALEC’s ALEC’s December 2013 meeting in Washington, D.C., where utility members and the utility trade association, Edison Electric Institute (EEI), almost certainly met with legislators to lobby support for anti-solar net metering efforts.

The Chairman of the House Energy & Environment Committee, Dennis Hedke, is a member of ALEC. At least five additional members of the Kansas House Energy Committee are known ALEC members: Representatives Steve Alford, Randy Garber, Charles Macheers, Scott Schwab, and Joe Siewert.

Testifying before the committee, the utility industry said that a less-than-retail rate of compensation would be fair, according to Andy Marso at the Topeka Capital-Journal. The utility aimed to credit customers who generate excess solar electricity at a rate of 150% of each utility’s avoided cost, which would very likely be far less than the retail rate of electricity.

But, Dorothy Barnett, the Executive Director of the Climate and Energy Project in Kansas, said the amended bill would have meant that, “At end of month, excess credits would have no value. Solar power generators would have no “rollover” credits from one month to the next or get paid for excess power generated.”

And, as Andy Marso also reported: Pro-solar advocates at the Vote Solar Initiative say that “customers who produce their own electricity save everyone money by lessening the amount of infrastructure needed within the grid, reducing the amount of electricity lost as it is transmitted over power lines, and preventing pollution.”

An amended version of the bill eventually passed the legislature, protecting net metering and delivering another failure to utility interests and their ALEC allies in the legislature.

Chairman of Committee Tied to Fossil Fuel, Utility Industry

The Chairman of the House Energy & Environment Committee Dennis Hedke has substantial ties to fossil fuel and utility interests that sought to eliminate Kansas’s clean energy policies.

In 2012, Hedke received approximately 20% of his campaign contributions from fossil fuel and utility entities. Hedke received contributions from:

  • Koch Industries, a major fossil fuel conglomerate with interests in coal, gas and other fossil fuels
  • Sunflower Electric Power Corp., which generates 76% of its electricity from big fossil fuel power plants
  • National Cooperative Refinery Association
  • Kansas Committee for Rural Electrification, which is funded by electric utility cooperatives
  • ONEOK, Inc., one of the largest natural gas distributors in United States
  • ANR pipeline, a natural gas pipeline company
  • Kansas Chamber of Commerce

Furthermore, Hedke has personal ties to the fossil fuel industry — he’s a “contract geophysicist whose client list includes 30 regional oil and gas companies,” according to a report from the Topeka Capital-Journal.

Zack Pistora, a spokesman for the Kansas Sierra Club said to to the Topeka Capital Journal: “It is clear that Hedke has been influenced heavily by the money involved from his contract work with the oil and gas industry. As a state representative, he needs to put his own financial interests aside and focus instead on doing what’s right for Kansans, our environment, and our future generations.”

Kansas Renewable Energy Standard Fight in 2013:

In Kansas, fossil fuel-funded front groups and Koch Industries also lobbied aggressively in 2013 to eliminate the state’s clean energy law. The Senate Committee on Utilities sponsored SB 82 and had 3 known ALEC members. The House Committee on Energy & Environment sponsored HB 2241 and also had 3 known ALEC members. Lead House sponsor Dennis Hedke is a member of ALEC and also has ties to the Heartland Institute, which promoted a book he authored.

Grover Norquist’s Americans for Tax Reform (ATR), which received $525,000  from the American Petroleum Institute between 2008 and 2011, worked to convince Kansas legislators to repeal the RES.

Norquist testified before the Kansas legislature in favor of the rollback bills, as part of his advocacy for repealing renewable energy standards in multiple states around the country. In addition, Chris Horner, from the fossil fuel-funded Competitive Enterprise Institute, testified before the state legislature, citing flawed information from the Institute for Energy Research. Furthermore, Americans for Prosperity worked to generate support for repealing the Kansas’ RES. Heartland Institute’s James Taylor flew into Kansas for an Americans for Prosperity event to undermine the RES law and also testified before the state legislature.

The Beacon Hill Institute published a flawed report with the Kansas Policy Institute, a member of the State Policy Network.

Finally, Koch Companies Public Sector lobbyist Jonathan Small had private talks with Chairman Dennis Hedke about the anti-clean energy bill before it was passed out of committee in 2013.