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Apr 10, 2014

Fact checking is an important part of the deliberative legislative process. In that vein, below are some of the facts regarding Kansas’ renewable portfolio standard (RPS).

Despite the factual reports conducted by our own Kansas Corporation Commission, opponents of renewable energy – specifically wind energy – continue to spread dishonest information in the TV ads and mass mailings. Americans For Prosperity (AFP) continues to try and convince you and the scare the public by saying the RPS is the root of all utility rate increases in the last decade. Such claims are categorically false – even a brief review of recent rate cases debunks AFP’s claims. With the House’s overwhelming vote to kill HB 2014 which would have repealed the RPS standards, you certainly understand the misleading media campaign being used against one specific industry – the wind industry.

Our message to you is: At some point enough is enough. For two years (2013 and 2014) the repeal of the RPS has failed to advance out of a House Committee and in 2012 an attempt was made to repeal the RPS on the House floor without a single legislative hearing. This year when the proponents chose to circumvent the House procedures by jamming the proposal into a House bill and seeking a House concurrence: THE KANSAS HOUSE SAID NO!!

Please do not allow special interest groups to stampede the House into reversing its decision made on March 26. Accurate information is a critical component for meaningful Legislative debate. It should be demanded from all groups seeking to lobby any member of the Kansas Legislature.

Rate Impact of the RPS
Per statute, the Kansas Corporation Commission (KCC) is required to provide annual reports to the Legislature on the wholesale and retail rate impact of RPS compliance. Four such reports have been provided in years 2011, 2012, 2013 and 2014. The rate impact finding is based on data provided to the KCC by the utilities. The findings are below:

Wholesale rate impact – 0% – 1.7% depending on the utility system
Retail rate impact – 22/100th of a penny of the about 9.9 cents per kwh retail electricity cost in 2013 across the states – while supplying 15% of the peak demand.
Figures are “fully loaded” meaning they take into consideration all aspects of integrating wind on each utilities’ system.
There is also a 1% price governor in the RPS statute stating that the KCC is permitted to exempt any utility that can demonstrate that compliance with the RPS would cause retail rates to increase by more than 1%.
In January 2014, KCP&L announced a new wind energy purchase from a project in Coffey County. KCP&L stated the total benefits to their customers over 20 years included a $600M savings from wind power which reduces the need to use other kinds of fossil fuel.

In the case of Infinity’s power purchase agreement with Sunflower, the price was so low that Sunflower determined that it would have a neutral or negative impact on their customer’s rates. “Wind energy is produced for less than $0.03/kWh in today’s PPA environment, which is less than half of your retail rates,” Matt Riley, CEO Infinity Wind Power before House Energy & Environment 2.14.13

Free Market System
Opponents claim that the free market needs to be allowed to work. While perhaps a laudable goal, it is disingenuous to tout the free market when talking about a monopoly utility system. Every facet of the utility industry is highly regulated at the state and federal level. There is zero competition and NO customer choice of service provider and the type of power provided.

Environmental Mandates
Westar press releases from their recent rate cases indicate the key reason for the increases are federal requirements and regulations. Specifically, the retrofit of LaCygne power plant, required by the EPA has a cost of $1.2 B; shared by KCP&L and Westar in addition to hundreds of millions of dollars invested at Jeffery Energy Center for federally mandated environmental retrofits.

Other Facts About the RPS

Hedge against fuel price volatility and encourages power supply diversification.
Hedge against federal environmental mandates which have been a major driver of electric rate increases in recent years.
RPS matters because it is a signal to the entire wind industry that Kansas continues have a stable policy environment that encourages growth and development of all forms of electric generation.
The RPS spurs job growth and private capital investment.
Nearly $8 Billion in new investment in about 10 years in Kansas
13,000 new jobs – primarily during a time of economic stagnation and retraction
Helped attracted other businesses such as Siemens (Hutchinson) with 400 direct jobs and 450 indirect jobs and Mars (Topeka) with up to 400 direct and 475 indirect jobs.
Does not use a single State General Fund dollar.
· Like any industry, this debate is about the competition for jobs and capital investment. The states with stable and favorable environments win capital investment.
· Passed by the Kansas Legislature as part of a comprehensive energy bill debated for two full legislative sessions. The final vote in the Senate was 37-2 and in the House was 103-18.
Renewable Energy Poll Results

68% of Kansans agree w/ Governor Brownback’s “all of the above” energy policy
91% of Kansans support renewable energy – not many issues enjoy such strong support
76% support increasing the use of wind energy
75% support 2009 RPS law of 20% by 2020
71% agree using renewable energy helps keep electricity rates stable
68% support increasing the RPS to 25%
73% willing to increase their monthly bill by $1 to increase renewables
By nearly a 4:1 margin, this is a deciding issue for voters