Thursday, August 5

More fallout from the Kansas renewable energy mandate

From Kansas Policy Institute:

More Fallout from the Kansas Renewable Energy Mandate
By Dave Trabert

Wichita residents recently expressed outrage at a public hearing on a proposal from Westar Energy that would allow them to selectively award rate reductions to industrial customers in the name of economic development. In typical subsidy fashion, the unfair advantage given to a few will be passed on to other customers under the proposal.

Allowing Westar to pick winners and losers is bad policy but it may well be another bad policy idea that’s prompting their request: the Kansas Renewable Portfolio Standard enacted in 2009 under Governor Parkinson. The ‘deal’ that allowed a new coal plant to be built in western Kansas (which has still not been allowed) created a government mandate that requires Westar and other electricity providers to purchase up to 20% of their energy from renewable sources. Put simply, the Kansas RPS is a huge subsidy to the wind industry.

Our mid-range dynamic analysis of the RPS¬†shows that rates will be 45% higher by 2020 when the last phase of the mandate goes into effect. There will be a significant negative impact on jobs, business investment and disposable income…and industrial customers who use large of amounts of electricity will be especially harmed. So now the RPS bailout of the wind industry spawns another subsidy program that allows electricity companies to shift the costs of hand-picked large companies onto other users. This type of bad policy will continue to harm regular customers until the RPS is repealed.