Climate and energy

Summary: Proponent, opponent, and neutral testimony taken on SB 265. Hearing will continue on next Wednesday.

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7:23 a.m. Always so lovely to be up and trying to function at this delightful hour, with just a thin sliver of crescent moon setting on the horizon. Although frankly there are many men and women out there making much, much, much bigger sacrifices for democracy so don’t for a moment think I am really complaining. Just need (more) caffeine.

Today, testimony continues on SB 265, the Senate version of the coal bill. The good news is that if everyone today talks really fast, we won’t have to be back here at 7:30 a.m. tomorrow.

Senator Apple gets us going.

Proponents, cont’d

Stanley Rasmussen, Dept. of Defense (in state of KS) and Army

SB 265 big piece of legislation, we are interested in provisions that concern state air quality laws, making them consistent with federal clean air act. We want uniform state laws, we work with NCSL to bring consistency and clarity to land use regulations that affect DOD. Those portions of the bill, we support those throughout U.S.

Stuart Lowry, Kansas Electric Cooperatives

Supports 265, has edits to net metering policy (MH – similar to edits KEC offered on HB 2014). For cooperatives to cooperate in statewide net metering policy this is what it needs to look like. We are proposing to allow customer to take advantage of meter spinning forward and backward and get full retail credit but excess generation goes to utility at end of month so it manages the subsidy the utility is providing. We also support Sunflower’s amendments on coop deregulation.

Opponents

Larry Patton, Protect the Flint Hills

Opposes RPS. Wants to preserve tallgrass prairie and RPS will threaten Flint Hills, last significant expanse of tallgrass in Kansas. We don’t want Flint Hills industrialized by wind. Common sense to keep wind out of Flint Hills. We own land in northwest Butler County, and near Meridian Way (MH, both wind farm sites) – but industrial wind is not okay in Chase County. Okay in fragmented farm ground, not okay in tallgrass. Destroying native prairie also destroys a carbon sink. Wind development in KS is happening, we are ahead of governor’s targets for renewables, we don’t need an RPS. It will get in way of what is already happening. If we move slowly to build transmission, and if we put in an RPS, it will intensify wind development pressure on Flint Hills because FH have the transmission, it is a perfect storm. So remove RPS from this bill. It will renew pressure to build in Flint HIlls- FPL still has met towers up in Chase County. We need to preserve Flint Hills for future generations.

David Springe, CURB

Opposed to RPS. We oppose arbitrary mandates on resource acquisition. Makes utility rates go up. Most utilities putting wind on system anyway, don’t need a mandate. We do support renewables, but not a mandate. Oppose net metering. We testify on this every year. There is already parallel generation in Kansas, that’s fine. There are fixed costs to being on utility system and customer needs to pay those costs. We don’t like meters spinning forward and backward, because you are probably not generating power at the time that we need to use it and the utility subsidizes our storage of the energy. Only people who can afford solar panels will get the subsidy. CURB opposes net metering but that said. The reality is the restrictions in the net metering bill as written are small. Very small. It won’t make much difference. If we are going to subsidize generation, we need to have bigger effort in state to subsidize energy effficenciy. That is a real energy policy, one based on EE. If you subsidize something, subsidize that.

Walt Chappell, renewable energy advocate

There’s some nice ideas in this bill, like wind energy and net metering, but there’s a poison pill in here. Last session was all about putting Sunflower Electric expansion through. This bill will produce more CO2. This bill is dressed up to get a coal plant through, we all know that. We don’t need to make that choice. Kansas has lots of other choices for energy. Solar thermal, for example – utility scale. Kansas has the potential for hundreds of megawatts. Xcel Energy is working on that in CO – they want 600 MW of solar thermal alone. That’s just next door. OK had a request fro coal plant, they killed it and put in wind. TX canceled eight coal plants because they were too expensive, put in wind instead, invigorated rural economy. Wind brings jobs. Solar is not new, many of these projects date from 1970s and 1980s. Thermal solar is relaible, and produces no CO2. In the mix of our discussion, think about all sorts of resources in western KS. It could be a major economic powerhouse. Solar can provide peak power during day, and wind can provide power at night. Our electrons can come from wind and sun. Do not let this bill pass by. Take good portions out, make them work. Don’t leave in the CO2. Co2 leads to global warming and climate change. This is not new information. Burning fossil fuels also has big health effects – air pollution kills many people prematurely every year. Burning coal also uses lots of water – there’s mercury, particulate pollution, the list goes on. Leave the Holcomb fiasco alone. In CO, in the 1980s, we produced 3,000 jobs in five years using renewables. Even more than that could come to KS, with developing renewables. Manufacturing wind components is another income stream for the state. But as long as Holcomb things is stuck out here, it keeps us from developing the good stuff.

Tom Thompson, Sierra Club

Opposes the bill. The purpose is just to allow more carbon dioxide and a coal plant for Sunflower Electric – two plants, actually. This will add to GHGs in atmosphere and controbute to climate change. Climate change is real and soe,thing needs to be done about it. Kansas has abundant wind and potential for renewable industry. Holcomb will undercut economic benefits from reneweables. We need a new energy plan that will decrease CO2 and increase renewables. SC does not support solar net metering in 265 – we want only one meter that goes backwards and forwards, and we want retail rates with an actual net. We also don’t want to restrict power of KDHE secretary. Supreme Court has designated CO2 as a pollutant under Clean Air Act. This bill severely restricts Secretary. Requiring state laws to not be stricter than federal laws also has unforeseen consequences. The RPS in this bill is not enough to compensate for all the CO2 from the SUnflower plant. The proposed amendment on coop deregulation is not okay with Sierra Club, either. There are a lot of unaswered questions about financing for a large coal plant, and KCC needs oversight to protect the ratepayers. There will be lots of new costs for burning coal and ratepayers will bear those costs.

Vaughn Flora, Kansas Rural Center

Opposes the bill. We support strong rural economy built on renewable energy, which KS has lots. Other states have effective net metering and aggressive RPS. This bill is ineffectual on both counts. The net metering is weak, and so is the RPS, it is less aggressive than what major utilities are already doing. Given the economic and regulatory climate, this bill will greatly increase electric rates in western Kansas with a new coal plant – the costs for new coal plants have risen sharply. The legislature should be protecting western Kansas from this energy, not putting it forward. A strong RPS would bring more wind development to western KS. The CO2 problems – we agree with Sierra. Colorado Energy Office already says it doesn’t want energy from plants. This project needs more due diligence. Also, water use in arid regions – this is not the place to build a coal plant, western KS needs water for other uses.

Neutral

Nancy Jackson, CEP

Let’s start with energy efficiency. Remember this – EE is the least cost msot immediate way to meet new demand in KS. EE is 3 cents per kilowatt hour, less than half the cost of new generation of any kind. Makes more sense than building new power plant and EE puts folks back to work – installing insulation, weatherstripping, ductwork, new HVAC, appliances from local vendors. For every dollar spent on EE, $5 circulate through local community. EE also lowers bills of all consumers, and helps homes, businesses, and churches. EE is a permanent improvement for the life of the building. Money, jobs, and less need for new generation. I have spent a lot of time on new stimulus package, especially the EE provisions. Recognize that – there are over $14 billion in recovery package for renewables and EE. More than $2.1 billion is available by competitive grants, and the states must certify that: that ratemaking complies with PURPA (decoupling); statewide EE building codes for residential and commercial and industrial – they must meet 2009 IECC codes, etc. This bill does not get kansas toward this level of EE. The RPS in this bill, CEP supports. We have a lot of potnetial for manufacturing wind components. Look at this map, states all around us have wind jobs, and we don’t, we are in the center of a donut. Kansas has huge renewable potential, we need more of these $$. On net metering, there are fixed costs that utilities have to bear – but your bill focuses on solar, and manyutilities feel solar is a high value resource because it provides energy at peak load. Some people may not feel this bill represents real net metering.

Marilyn ???, Secretary of Administration

Proposes amendment – there are new standards on the way, we need to keep up with latest ASHRAE and IECC standards, so this would give us flexibility. We also want to carry out energy audits, not just collect data – we need to analyze the data and its energy use, and then correct the problems. We need energy audits of all state buildings every five years, and the audit will also offer us solutions.

Questions?

Sen. Apple for Marilyn – Q: On leasing section and EE audits, would that be a burden? A: Landlords would have to take extra step, but lease terms are spread out over several years and there would be time to educate and do audits.

Sen. Francisco for David Springe, CURB Q: Even when I don’t use electricity, my bill is not zero. I get a bill every month. What does that fixed cost cover? A: Utilities have set level of costs – fuel costs, transmission costs, etc. Most cost is generation assets, distribution assets, and administrative infrastructure – control rooms, linemen, etc. KCC evaluates those costs, and tthat is their revenue requirement that gets debated in rate cases. Then they have to recover those costs between commercial residential and industrial customers. Your bill has monthly charge that recovers the costs, and volumetric costs. Customer charge supposed to cover your meter and premises, but not the generation, etc. This is a flat rate. When you pay bill, that customer charge pays piece of set costs. But you are missing the rest. Q: So I will never get a bill that says zero. Even if my meter spins backwards. These people will still pay that customer charge. And interest in net metering is to reduce need for new power generation, so we avoid building new generation by encouraging net metering and we avoid those costs. A: Interesting question. Utilities buy plants in big chunks. How many solar panels can avoid a 100 MW plant? a lot. And what if hailstorm takes out your solar panel? Your source is not reliable all the time. Impact from net metering is really avoided fuel costs, which is our current law for parallel generation. I don;’t say I have right answer, there are lots of shades of gray here.

Sen. Peterson – Q: Does PURPA allow different allocation for customer-generator costs? A (Stuart Lowry) The second title of PURPA prevents separate rate design for customer-owned generation. You can’t have separate rate class.

Sen. Francisco for Stuart Lowry Q: If we were to have a plan for net metering – what are we trying to do? What is the goal here? What works for coops? A: (1) do you want to subsidize – or incent – customer-generation? (2) If so, how much, and (3) who do you want to fund it? Net metering funded by other utility customers. There is also disproportionate impact on coops because people would install wind out in areas we serve. Our amendments would allows KS to have net metering but minimize the subsidy paid by rural Kansans. Q: Is this a balance between individuals having ability to generate electricity? Or are we establishing protection for utilities, and not alllwing ranchers, community colleges, schools, homes, etc. to have their own generation? We all need to work together on grid. We need the backbone, but allow individuals to control. Otherwise we are just here to support the utilities. A: I agree, there is a balance between individual and business. We tried to do that.

Sen. Lee for Stuart Lowry – Q: Not having net metering doesn’t mean people can’t have their own generation, they can buy the batteries and not get subsidized. I disagreed that not having net metering (MH misses) only benefits you if you are rich enough to buy a solar panel or wind generator. More power to you if so. Lower income people don’t get helped by net metering.

(MH is going to have to go home and tell her husband that he is upper income because he wants net metering.)

Sen. Brownlee (MH misses question) (and answer)

Sen. Brownlee for Marilyn Q; What would it cost state to do energy audits? A: On state-owned buildings, when we do audit, we do it thru FCIP program. The companies that do audits guarentee the improvements that result from the audit. You pay them through your savings on utility bills. An energy audit is part of the total costs. A: We have upfront costs from audits – Q: There are no upfront costs to audit. The ESCOs recover their costs as part of audit.

Sen. Emler for Marilyn Q: If we don’t put a date in on a standard, then is it unconstitutional delegation of responsibility? A: Staff is looking into that right now. Standard should be identifed in rules and regs process. Q; Okay, we need to know before adopting amendments.

Sen. Emler for Springe CURB Q: Proposed amendment on net metering, what do you think? A: More palatable. Q: KUSF fund allows for service in high cost areas and moves the cost to low cost areas. How about similar model for Kansas net metering fund? A: Are you just having fun with me? Q: You don’t need to answer.

Sen. Reitz for Nancy Jackson Q: We need to make more efforts to improve EE, and it should be big component of this bill. I don’t know if we are making enough effort to make this happen in this bill. People need to realize that energy costs will go up no matter what, and they need to conserve. I know I need to weatherize my house – and the word should get out. EE is key to focus on. And I also like nuclear, but it’s not in this bill. The emphasis needs to be on EE.

Sen. Peterson for Marilyn Q: When municipalities adopt these codes, (MH misses) do you think the lifecycle costs would cover your standard flexibility? A: Yes sir we do.

Sen. Francisco for Marilyn Q:

Sen. Lee for Nancy Jackson Q: Your EE testimony is interesting, I want to visit with you about federal bill, and we need it in overall proposal. I don’t know how much it helps our part of the state. And I don’t know how it helps the western part of the state get more access to generation, and we can’t force eastern part of state to give up their power. Wetern half of state already uses less energy than eastern half. EE is good goal but it doesn’t help our problem. But tell me more about stimulus dollars. A: Federal EE dollars come in either state block grants, which can be used for low income weatherization, for utility version of FCIP programs (MH – PAYS programs), low-interest loans, etc.Then there is a seaprate pool of $$$ that I think we could miss out on – available on competitive basis. State energy office can apply – but to be competitive we need ee building standards. EE building standards protect consumers from rising energy rates over the long haul, also. There are other provisions as well.

Sen. Francisco for Patton, Flint Hills Q: I am concerned with national RPS, too – how do we get ready for that? We need to officially protect that area.

Sen. Francisco - And why can’t we require sale of energy between eastern and western Kansas? The Senate did that last year (MH – with BPU provision in coal bill last year) If that is legal there, why isn;’t it legal here, to require eastern KS to sell to western? (no answer, there is some confusion – )

Sen. Apple – hearing stays open till next Weds, if you have amendments or items, bring them up.

— Maril Hazlett, www.climateandenergy.org