Climate and energy

Summary: (to be filled in later)

• 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 political updates on energy issues, check out gpace.org and/or kansas.sierraclub.org
  
• For questions on the legislative process, call the Kansas Legislative Hotline – 1-800-432-3924, or check out the legislature’s website.

******************

Called to order. First bill is 2115, telecom, MH skips.

Hearing opens on HB 2116

Cindy Lash briefs bill. (1) it requires KCC to biennially prepare electric generation report on capacity and peak load of utilities, for 5, 10 and 20 years. (2) requires utilities to develop energy efficiency and load management programs, based on PAYS.

Rep. Kuether for Cindy – explain PAYS program – Cindy – I don’t know. Larry Berg, Midwest Energy – Pay as you save – an EE program that finances EE improvements to a home based on home energy audit. It puts costs for EE renovation on the customer’s bill – and never finances more than the savings, so customers’ overall bill never go up. Usually focuses on improving building envelope. Contractors do work, Midwest finances improvements.

Rep. Sloan for staff – Q: Does KCC not have to approve the program? Am I missing it in the bill? (staff reads) Q: Are we getting into problems with cost recovery, if KCC does not approve? (They look at statute book, answer should be forthcoming)

Proponents

Tom Thompson, Sierra Club
Supports bill, reports important for consumers and citizens, will help to manage electricity and resource planning. EE and loan management programs will help reduce need to build expensive new generation capacity in Kansas, especially those based on fossil fuels that emit greenhouse gases. EE will also help reduce energy bills.

Neutrals

Mark Schreiber, Westar
Neutral but has comments on bill. What does “enhanced EE” mean? Second, is purpose to slow demand growth or make it a negative trend? If lower, hard to meet that standard. That would be 50-75 MW reduction. Westar also looking at PAYS program to see if it will work for them. We’re not opposed to program but it may be duplicative. We also supply load forecasts to SPP and EIA for up to 10 years. 20 year forecasts very speculative, squishy on assumptions.(MH: Mark did not actually use the word “squishy.” Can’t recall exactly what he said.)

Larry Holloway, KCC
Does not oppose bill – wording probs, though. Biennial report – fuzziness on date. And Energy Office is now Division of Energy Programs – but they don’t set policy, they execute it, so this should really be KCC.

David Springe, CURB
Neutral but has concerns on bill. Reporting is an implicit mandate for utilities – and this is basically a mandate for utility EE, too, but some states have gone toward third party provider for EE programs. I don’t think we should establish a presumption that utilities are best providers of EE. CURB is willing to work on consumer protections for EE – and PAYS turns utility into a bank, in effect, which is not exactly their business. Utility has incentive to loan money, and they have ultimate collection system – the ability to turn off your power if you don’t pay. Hopefully the program works out, hopefully that doesn’t happen. And for Midwest to do this, is entirely different than a large utility like Westar doing it. PAYS is good program but very expensive. If PAYS is required, consumers need protection against abusive lending processes. Requiring blanket cost recovery for these programs would also be a problem. The KCC needs some discretion to build in consumer protections. If PAYS is constructed perfectly, the borrower takes on a lot of the costs, not the utilities. Beware of mandates.

Questions?

Rep. Sloan – nothing in statutes requires… (MH misses)

Rep. Knox for David – Q: When utility becomes bank, it still looks like the payment is limited to the savings. And how much would it cost to run this through bank anyway? A: Intent of program is to install only economic improvements, so savings justify costs. But the assumptions are based on fuel prices in part, which fluctuate. The savings depend on forecast of energy costs. If you project high fuel costs, you save more – and if process fall, customer is stuck with actual bill regardless of projected savings. And there are other mechanisms for low-income loans, that just the utility. There just need to be more protections.

Rep. Holmes for David, about Kansas Housing EE program (MH skips) and another question – on your testimony, what do you think about section one. Are you neutral? A: Yep. I think that reporting is good.

Rep. Holmes for Mark Q: (MH misses) Updating this report is very important. We need a document so legislature can have centralized source of information. A: We aren’t opposed to that. As long as it is consistent.

Rep. Moxley for David Q: We do have a hammer over utilities – (MH misses – sorry! Such a Monday) A: We do have a challenge – if we are serious about EE, we probably need separate nonprofit or agency whose sole goal is to do EE. EE is a lot broader issue than it gets defined by the utilities. Utilities do have their own programs. Question to wrestle with – what direction does KS want long-term for EE.

Rep. Holmes for David Q: If we had state agency to do that, should it be KCC, or whom? A: KCC does have knowledge and skill in energy that KsHousing Corp doesn’t. Either way, it’s a discussion we need to have. Those two have pros and cons.

Hearing closed on 2016.

Hearing opens on 2017.

Cindy briefs bill. Utilities required to develop retail tariff for wind generation. Munis are excluded (MH and it looks like effectively small co-ops might be too)

Rep. Sloan Q: would future RPS negate need for this bill?

Rep. Holmes Q: Intent is that customers can buy wind separately. It’s not tied to RPS.

Neutral

Scott Jones, KCPL
We have some reservations. We think green power is an asset for all our customers, not just one class. A better approach is to allow all utilities to temporarily decide. When RPS are more known, then we would support a green tariff.

Rep. Moxley for Scott Q: If wind is cheaper than rest of it, then why wouldn’t you want this tariff? A: A wind tariff is a premium, and some customers don’t want to buy it, but we need freedom to build it.

Rep. Holmes for Westar Q: You had something similar, right? A: We did have wind tariff at one point, and we filed for green tariff at KCC recently, so people can choose to pay extra for that.

Rep. Moxley for Mark Q: Is wind cheaper or not?

Larry Holloway, KCC – when Westar came in, we required green power tariff. If a customer prefers green power, you can sign up for a block and pay 1 cent extra per kWhr. This goes to offset energy cost adjustment for all westar customers (MH which is not necessarily new wind generation, is it?). There was another previous green pricing tariff in KS but it was removed. It wasn’t that popular but it was 5 cents per kWhr then, too.

Moxley – does this bill do anything new? Holloway – utilities already can offer a green tariff if they are regulated. This bill would make mandatory what is currently a voluntary option.

Rep. Knox for Holloway Q: Explain that last sentence. A: The bill would require all utilities to do what Westar does. Q: Why was Westar required? A: Commission wanted to raise public approval for this type of program, at CURBs suggestion. Q: Does KCC typically make requirements of utilities that don’t come from legislation? A: KCC interprets the legislation with rules, regs, and orders.

Hearing closed on 2017

Holmes for Holloway – please explain roles of legislature and KCC, this relationship.

Holloway – KCC gets its authority under statute, not from state constitution. KCC has broad authority over state utilities, so it can create rules and regs. (Etc.)

Holmes – KCC is creature of legislature. Holloway – yes. Holmes – so legislature can give and take away. Holloway – that is a good observation. I would add that there are times when Commission’s broad authority – when legislation seems to direct KCC, you might risk restricting its authority. (Gives ie of 2004 Westar rate case) Sometimes the language is hard to hammer out.

Rep. Knox – Q: elaborate on process that KCC uses to make new requirements. A: When we open generic investigation into policy question, a proposal is put forth, for people to take shots at. Interested parties can intervene and respond in the record. (MH, like decoupling docket). Resulting order can establish new requirements. Q: How long does that take? A: If controversial might be several years. Due process is required.

—- Maril Hazlett, www.climateandenergy.org