Not In Kansas Anymore: Politics Threaten State's Wind Energy Market
Kimberly Svaty, Thursday 06 September 2012 - 12:56:48
According to the American Wind Energy Association (AWEA), Kansas is leading the U.S. in new wind farm installations this year. By the end of the year, eight new utility-scale wind projects will come online - representing approximately $3 billion in new investment - and the state will have more than doubled its installed wind power by adding 1.489 GW of new wind power capacity.
Sixty percent of the nearly 1.5 GW that will be placed in service this year will be exported. The balance will remain in state to fulfill the state's renewable portfolio standard (RPS) objectives. (Kansas' RPS is 20% of peak demand capacity by 2020.) Of the existing 1.076 GW of wind power, the vast majority is used in state, and roughly 8% is exported to nearby Missouri. Power from the new projects will be exported to Missouri Electric Cooperative and Tennessee Valley Authority customers.
For example, TradeWind Energy, a Kansas-based wind developer, is sending wind power from a project developed in Oklahoma to customers of Southern Company. Meanwhile, BP Wind is constructing the 479 MW Flat Ridge 2 wind farm as major oil and gas developers are fracking the ground below. And Siemens' wind turbine nacelles, manufactured in Hutchinson, Kan., are being deployed across many new Kansas wind farms.Stormy political clouds
However, all of this progress is threatened by the looming expiration of the production tax credit (PTC).
While Gov. Sam Brownback, R-Kan., continues to work with Sens. Jerry Moran, R-Kan., and Pat Roberts, R-Kan., to extend the PTC, other members of the Kansas congressional delegation, such as Mike Pompeo, R-Kan., and Tim Huelskmap, R-Kan., are advocating for an end to all tax incentives for renewable energy.
Statewide, the political attitude toward wind energy has also changed. Kansas’ congressional delegation has traditionally been supportive of an "all of the above" energy policy and transmission development, but that changed when these representatives were ousted in Kansas' recent primary elections.
Kansas has also endured two recent attempts to substantially change its 20% by 2020 RPS in the 2012 legislative session.
The first attempt was to freeze the RPS at 10%. The RPS-freeze amendment was made on the State House floor to a bill dealing with energy storage introduced by State Rep. Forrest Knox, R-Fredonia, vice chairman of the State House Energy and Utilities Committee. However, the amendment failed.
The second amendment was immediately introduced by State Rep. Dennis Hedke, R-Wichita, and would have tied further increases to the RPS to the permitting and construction of the Holcomb Power Plant expansion.
The second amendment passed the House, but House Speaker Mike O’Neal, R-Hutchinson, sent the amended bill back to House Energy and Utilities Committee for a hearing that lasted for five days. Ultimately, the amendment was defeated by the committee. Therefore, the RPS survived unscathed.
However, there are no guarantees that state legislators will not redouble their efforts to ease the RPS in the future. For starters, the state is losing two key advocates. First, Speaker of the House Mike O’Neal, R- Hutchinson, whose Reno County district is home to Siemens’ nacelle plant, has announced his retirement.
Another key lawmaker and energy advocate is Carl Holmes, a conservative Republican and a 28-year member of the Kansas legislature, longtime chairman of the House Energy and Utilities Committee, chairman of the Kansas Electric Transmission Authority and tireless advocate for transmission construction. Holmes was defeated in the primary election by a Tea Party candidate and, therefore, will not be returning to the legislature.
In the August primary elections, the State Senate moved decidedly conservative, and the State House may have tilted further to the right as well, placing further uncertainty on the short-term prospects for wind energy in the state.
Therefore, the future of wind energy development in Kansas faces a confounding future, and the 2013 legislative session will be very telling.
Two prominent state legislators vying for House and Senate positions are also currently on the board of directors for the American Legislative Exchange Council (ALEC), a conservative-oriented policy forum for state legislators. Moreover ALEC's board of directors is contemplating model legislation to encourage legislators to repeal all state RPS programs.
Even as top lawmakers at the state and federal level support further development of wind energy for export and related component manufacturing, some Kansas congressional members are pursuing legislation to eliminate federal tax incentives, and many state policymakers are actively pursuing legislation to repeal the state's RPS.
Despite policy uncertainty at both the state and federal level, however, there is one constant: Kansas still has a rich and plentiful supply of high-capacity wind that can provide low-cost, renewable energy.
Kimberly Svaty is a consultant at the Wind Coalition, a regional partner of the American Wind Energy Association. She can be reached at (913) 486-4446 or kimberly©gencursvaty.com.
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