Climate and energy

Summary: Testimony taken on HB 2020 (renewable energy incentives), and 2043, 2051 (net metering). No motions, votes, or amendments and the issue goes to subcommittee at 9:00 a.m. Friday (tomorrow) in Docking 783.

• For CEP’s notes on net metering, click here.
• If you would like to find your legislator and contact them about any specific piece of legislation, click here.
• For specific bill tracking, check out KNRC.
• For questions on the legislative process, call the Kansas Legislative Hotline – 1-800-432-3924, or check out the legislature’s website.

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Net metering. Net metering! A topic we hear lots and lots about at CEP. I looked back over my notes on net metering from the committee hearings last year. Plenty has changed in the past year. It will be interesting to see if any of these arguments for or against net metering have changed as well.

As I recall, the arguments against – (1) only rich people can afford solar panels or wind turbines so net metering is a subsidy for them, and (2) net metering costs more for rural co-ops than IOUs, how do you get around that problem in a state with so many co-ops.

Arguments for – (1) energy independence, diversity, security, (2) offset for high fossil fuel prices, and (3) fair price needed to get everyday people into small renewables market.

That’s not comprehensive! Just off the top of my head. Will be interesting to see.

Very, very full room. Piles of testimony.

Hearing opens on HB 2020

Melissa Dublin briefs bill on renewable energy incentive program. Applies to installations of 5 MW or below. Reimburses on basis of capacity generation.

Proponents

Rep. Sloan (his bill) – This bill attempts to help people who want net metering and those who want community wind. Offers a balloon (amendment) to address rural co-op concerns with legislation. 5 MW limit is based on about three wind turbines (MH – 1.5 MW turbines?) (MH feels that Dan Nagengast, were he here, would want our readers to know that community wind turbines can start around 200 kW and move up to less than 1 MW, too – and Dan feel free to correct me) Amendment suggests that KEC would standardize interconnection among co-ops and KS Munis would standardize interconnection among munis. I don’t think we should exempt munis and co-ops from net metering.

Hans Nettlebad (sp?) – American Institute of Architects
People, planet and prosperity – their mission. KS is windy, use it. KS needs to embrace renewables. Critical to establish statewide net metering standard, because patchwork utility rules not helpful and often stymie small renewables. KS needs to diversify energy resources and reduce emissions. The emissions also make us vulnerable to future emissions taxes and controls. Support this bill.

Opponents

David Springe, CURB
OPPOSED to bill. We are opposed to net metering. There is some good stuff but problems in bill. The rate structure is arbitrary and makes no sense, based on retail rate. These costs have no relation. Big rate problems. Also, a 5MW generator is NOT small, can have large impact on system. There is also no cap on this bill. I do agree that if we go down this path, co-ops and munis have to be included. Everyone has to play. It has to be fair to co-ops and munis, too.

Phil Wages, KEPCo
Opposes bill. Main diff between this bill and parallel generation and upcoming net metering bills – those others are offsets. This is not an offset, it incents small generators to put 5 MW up all over state. The economics don’t work (explains). Very hard on small rural co-ops.

Neutral

Nancy Jackson CEP
This is described as incentive for renewables. We struggled to understand what was being incented. Net metering is to reduce load on residential basis. But 5MW is much larger. To provide communities with opportunities to benefit from self-generation – this form of legislation might not meet that goal. A community is not going to be able to pencil out the project with a 60% payback. This is a great start toward a conversation for these goals, but the legislation is not quite there.

Questions?

Rep. Long for Hans – Q: You say KS lags behind Colorado. How do you explain this? I heard Germany was number one. A: We just look at wind potential on state by state basis. KS has a lot of potential, but is not meeting it.

Hearing closed on 2020.

Hearing opens on HB 2043 and HB 2051.

Rep. Holmes – Testify on both net metering bills at same time (MH – the bills are all but identical – just wind and solar) you only have two minutes because there are 17 of you.

Melissa briefs bill. Long and complicated bill. Reimbursement rate for customer’s net excess generation (NEG) is 150% of avoided energy cost, paid in form of credits to bill.

MH: Key point – these bills define net metering as generally the equipment needed for retail and generation sales. This is significant because net metering is traditionally defined as when customers sell back their excess power through their interconnection to the grid using a single, bi-directional meter. That is not the definition in this bill.

MH: Another key point, where the proposed legislation differs from many net metering bills – there are some provisions that in effect seem to revoke city and county zoning that prohibit wind turbines in residential areas. State zoning would override local power. That may turn out to be problematic.

MH: I know no one likes to do this.. but I really do recommend you read one of the bills to see what it is like… and if you really care, compare it to the net metering policies in other states described at http://www.dsireusa.org.

Rep. Holmes – reminds conferees not to read testimony word for word, just summarize in two minutes.

Proponents

Dave Sampson, Oak Grove Fabrication
Solar dealer from Flint Hills. Pro net metering, would like 1:1 retail rate. The green energy does not produce carbon dioxide emissions, it is very good electricity, it’s worth the retail rate, and the utility will be getting the renewable energy credit. We also want another crop in rural countryside – not just to offset residential usage, we want to produce electricity like a crop. 99,000 watts per farm.

Hans Nettlebad, AIA
We support these bills. KS has great resources and net metering is one way to use them. We agree with previous testimony – we think the payback should be better than what is suggested in bill.

Mark Schreiber, Westar
We support these bills. Point out – important to appropriately size net metering to the load. Also clarify that it is retail peak load, not just any peak load – like from wholesale customers.

Scott Jones, KCPL
We support these bills. Customers need to implement more solar and wind generation. We have supported the bills in the past. There is increased residential and business interest in self-generation – schools and churches, too. We recommend allowing net metering for all renewables, not just wind and solar.

???, Tom Crebs? Association of School Boards
We are a proponent, not an opponent. These bills will encourage schools to at least investigate generation of their own power. Three districts have done so, this will encourage other districts to move ahead. Schools can move KS ahead on green energy, and it benefits schools as well and cut energy costs.

Opponents

Stuart Lowry, Kansas Electric Cooperatives
We support incentives for customer-owned renewables, we oppose net metering. We think the committee could focus on whether you want to incent this or not, and how much of an incentive should be offered, even an annual dollar amount, and then figure out who funds the incentive. Utility customers fund net metering incentives. Most small wind would be installed in rural KS and the costs would be born disproportionately on rural customers.

Tom Thompson, Sierra Club
We oppose this bill because this is not real net metering, it uses two meters, it is dual billing, not true net metering. We want one meter that goes backwards and forwards, with retail 1:1 reimbursement. Develop a bill more like this and we will support it. Net metering doesn’t cost, it pays. People need to be able to invest in renewables, and this will add to customer independence, and will help utilities build less generation – and this will keep rates down.

Brad Mears, KS Muni Utilities
Oppose the bill. We support renewables but not net metering in this format. We don’t want to implement net metering but lost our control over zoning. The bill has some nice safety privisons that we like. But sections 18 and 19 declare local regulations void and unenforceable re wind turbines. We suggest that renewables and net metering should not come at expense of local control. We want to be supportive but not at this price.

Nathan Eberlee, KS League of Munis
Oppose the bill. Echo previous sentiments. This bill undermines local authority to protect property owners. Cities need to be able to respond to concerns of local property owners, so we oppose those portions of bill that affect our zoning powers.

David Springe, CURB
We oppose bill. This bill is not net metering. Current KS law allows parallel generation. This bill increases the subsidy and gets people more money for doing small renewables. We support current law on books – parallel generation. We have this debate every year. Current law recognizes that utility incurs fixed costs that net metering does not cover. Spinning a meter backwards negates that recognition. It lets people use the grid to store their energy without paying for it. This is a subsidy. It’s not large but it is a subsidy. All that said – all that said – we realize that legislators’ job is to set policy and determine incentives. The impact of net metering in this bill will not be large on KS utilities. If you do implement this bill, realize that rich people can install solar panels and other people can’t, so know who you are subsidizing. And in discussions of comprehensive energy policy, we also need to subsidize low and fixed income people, too, there needs to be a balance.

Randall Allen, KS Association of Counties
We disagree with the pre-emption of local authority, We have no problem with net metering parts of bill. But don’t pre-empt local land use decisions. Ironic that a bill whose purpose is to encourage small and community energy removes the  community based concept in allowing local land use decisions. Net metering is one thing, local control is another. Remove section 18 and 19 from bills.

Eloise ???, KS Association of County and Zoning Officials
Leave land use decisions in hands of local officials. We have no position on net metering. We are working on streamlined regulations for renewable zoning, there is a lot of interest in these. We are interested in safety issues. Sections 18 and 19. Please strike from bills.

Jason Fizzell, KS Land Trust
We oppose section 18 in bills because it removes local control and convenants. Some landowners might want to give up air rights for conservation purposes and we want them to be able to do so. This provision also interferes with conservation easements.

Allen Pollum, Nature Conservancy
Our concerns are same as KS land trust. These provisions – section 18 and 19 – could interfere with conservation easements. They would void many of our existing easements.

Neutral

Nancy Jackson, CEP
Three comments. (1) New Section 18 would be an obstacle, not an incentive. (2) All three bills talk about interconnections standards. We recommend that that process include FERC standards for small generation – best for off the shelf, standardized installations. (3) Any renewable generation does have two aspects to it – the electron, and the renewable energy credit. Who owns the RECs? The customer-generator, or the utility? Generally, though – there has been a lot of discussion about incentives and subsidies. What subsidies exist today? Lots exist for fossil fuel generation. Very few for renewables. Many Kansans want their energy from wind and solar, native KS resources. On subsidies – last federal stimulus package included tax credits for small solar for eight years. We are all paying for those. Because of those general solar subisidies from feds, if KS does not have net metering, we will be leaving money on the table. It will go to states who have net metering.

Questions?

Rep. Knox – for conferees worried about Sections 18 and 19 Q: Explain specifics of putting solar panels on house cause harm to community, and why you would want to control this. Also – what do we do about munis, and how do we compromise on conservation easements? We want to incent renewables, but how do we compromise on the problems.

Rep. Holmes – same question – I want all of them to respond.

Brad Meers KMU, in response A: Solar is not our problem… but we would want the structures to be able to support the panels. Wind is another issue, with setback standards, fall zones, damage, etc. Those are some examples.

Knox, follow up – Q: What if I have a tall tree on my property and it falls on neighbors house? A: That is not a manmade structure. Q: So – insurance and liability issues cover trees, so do they not cover towers? A: That is a community interest, to make sure that happens.

Rep. Knox for Nature Conservancy, Allen – on compromising A from Nature Conservancy – NC has no position on net metering. For compromise just put in specific language saying it doesn’t impact conservation easements. Knox – can you bring that language? Allen – some of it I can, there might be a problem with the Cheyenne Bottoms, it’s under different regulations/ planning control. But I can send language for new section 18. Knox – that would be great.

Tom Thompson, Sierra Club – other side of coin – it’s reasonable to have towns doing safety zoning. But state law needs to keep prohibitive zoning from affecting renewables.We want everyone to have access to renewables.

Rep. Knox for Mark Schreiber Westar – Q: Would utilities support true net metering with meter running backwards? A: Yes we would. Differences would come in handling net excess generation. Q: If we expand this to all renewbles would you support it? A: Yes.

Scott, KCPL – Answers yes to same questions.

Rep. Knox for David Springe Q: Re fixed costs – if utility came up with fixed cost per capita, and someone could pay monthly fee for access to lines, would CURB object to true net metering? A: Depends on details but I don’t think so. (explains more) Or you could pay fuel costs only. We want to make sure there is recognition that fixed costs of electricity exist and should be paid. A tariff for net metering customers that was different than regular customers. Then we would support it. Q: The existing system subsidizes low energy users. Is that true? A: Depends who you ask. Any rate design there is functionally subsidizes somebody.

Rep. Myers for Chair – Q: We used to have a list of existing state subsidies for renewable energy? Do we still? Answer from staff – no sure.  (MH – the KEC put this list together in 2007 and it is on their website)

Rep. Myers for Springe – Q: Explain parallel generation, current law. A: It functionally has two meters, one for use, one for generation. Customer-generator gets 150% of avoided fuel cost. (MH – remember, fuel costs do vary from utility to utility). Q: This bill has same reimbursement rate. A: For the power over and above what you use. You still pay a full retail rate bill. You get credited at lower cost. And the customer is still using the grid. You could argue whether the current law is perfect. Q: What difference does two meters versus one meters make? A: The meter that spins forward you pay full retail rate. The meter that spins backwards you only get 150% avoided costs. You don’t net to zero. Q: But there is very little difference in amount paid under parallel generation. We have that incentive which very few people have not taken advantage of. A: Is it not an economic incentive?

Rep. Myers for Scott – Q: MH missed. Scott A: very few people have taken advantage of parallel generation over seven year period. It went into effect in 2002.

Westar – only 30 customers have taken advantage of parallel generation. I think they are all wind customers.

Rep. Sloan for KMU and Muni League Q: Would it help if we had you establish codes for renewables within six months of this law’s passage? Then you wouldn’t establish restrictive codes on renewables, but you could have local control. A: That is closer to what we would be interested in. The major problem is that you are removing local government from equation. Q: Most muni codes make it difficult to do anything, and we want to promote renewables everywhere.

Rep. Kuether for Rep. Johnson Q: Did Hays/ Ellis County have a zoning vote on wind? A: Yes, they did (MH: restrictive zoning on large wind project in Ellis County) Q: That’s an example of local control.

Rep. Holmes for Rep. Johnson Q: Ellis county has had quite a debate on this. A: Yep, it got so bad one guy ended up in jail for beating his wife and setting a truck on fire. Q: Ft. Hays State wants to put up a turbine for the university – but they can’t can they. But a Regents institution can. How would that be viewed in Ellis? A: Ellis likes wind, but a small group of people in area of proposed turbines who said that wind power was bad for human health and would cause convulsions. Our research department said there was no evidence of any human health problems from wind, but there was psychological factor. If you don’t like wind, you don’t like it, and not liking it might make you sick if you live by a turbine. The leader of the pack who said wind was bad for human health was… (MH edits).

Rep. Talia for Stuart Lowry Q: What is the peanut in the bill? Your testimony says that it would (MH misses) Where in the bill does it say you would have to pay retail prices for wholesale power? A: The language of the bill requires a meter to run forward and backward. Backwards means giving credit against any usage. Q: Is that (refers to section).

Rep Siewart for Nancy Jackson Q: I represent rural area – you want to support wind and solar but only in the country, and rural co-ops only ones affected. My members pay the cost. Instead of net metering why don’t we just give tax incentives straight to people who want it instead of burdening rural people? Everybody wants wind power, but they don’t want to pay for it themselves they want to make rural people pay for it. A: The co-ops have had trouble because it disproportionately affects them –– Q: All the restrictive city zoning means that rural people get hurt. A: I would support a tax incentive. We testified neutral. We are responding to notion that cities and counties should have chance to make their own decisions. We are Westar customers in rural area, BTW, and my husband and I could put up a turbine. As far as policies to incent small renewables, there are multiple possibilities – ie, allow net metering to apply toward an RPS.

Rep. Wetta for anyone Q: To put up wind turbine costs how much? A: Some as little as $6K. Q: How long does it take to pay for itself? Bill Smalley – could be as low as 5 years with the new incentives. Turbines are good investments these days. Schreiber – depends on the price of power. (MH – answers are all over place – 5-20 years)

Rep. Moxley for Schreiber Q: Why are you willing to pay full retail rate for someone else producing energy and putting it on your system? A: Because it promotes small renewables – we do want it to be sized to load. Second, other IOUs told us when we asked that there is not a lot of participation on net metering (except in CA) so there isn’t a big impact. Q: Do you expect to pass cost on if net metering became a big factor? A: It would probably be worked into revenue request. Q: You think it’s so small a part of your supply it doesn’t matter.

Rep. Holmes for Westar Q: What percentage of your customer base is in city limits? A: Probably 90% live within zoned area. Q: So only 10% can put up turbines. What is your position on the zoning question? A: We care about safety and fall zones, other than that it is a local zoning issue. Q: What is difference between ham radio tower and wind turbine? A: Not much. Q: And we allow ham radio towers.

Adjourned.