OPINION: Give Kansans a Utility Bill Break

May 30, 2014 by AFP

Every time you flip on a light switch, Topeka makes sure it costs more than it should. It’s been this way since 2009, when our state legislature and Gov. Mark Parkinson forced the state’s utility companies to obtain 20 percent of their electricity by the end of the decade. They called this mandate the Renewable Portfolio Standard.

It isn’t working. The RPS law is a case study in unintended consequences. No matter how well intentioned it is, it harms our state’s businesses and families every day.

One-size-fits-all mandates like the RPS always come with a high price tag. For Kansans, the costs come from the high price of renewable energy. Our state derives most of its renewable energy from wind power. Yet electricity generated from wind power is much more expensive than electricity from other sources like natural gas or coal.

The data bear this out. According to the most recent estimates by the federal government and independent analysts, natural gas costs less than half of what wind power costs. Coal is 49 percent cheaper. While wind may seem cheaper at first glance, it actually requires expensive backup from other energy plants. The wind doesn’t always blow – and when it doesn’t, you pay for it in your utility bill.

Yet RPS laws force utilities to choose the more expensive electricity option. Topeka is thus unfairly choosing winners and losers in the energy industry.

This favoritism adds up quickly for Kansas families. The state’s consumers now have utility bills that can be hundreds of dollars more than they would be without the RPS. States with RPS mandates average 27 percent higher electricity prices.

Other states have electricity prices that don’t cost a pretty penny – and some of them are our neighbors. Already, Kansas’ residential and commercial electricity prices are higher than most neighboring states by between 10 and 30 percent.

For these reasons, the country is catching on to the danger of RPS laws – but not Kansas. During the 2000s, when the economy was flying high, states passed similar laws left and right. They promptly stopped when the Great Recession hit in 2008, likely because they did not want to pass higher costs onto struggling consumers.

Kansas didn’t get the memo. We passed our RPS law in 2009, the last state to do so.

Since then, our average electricity rates have been climbing compared to states without RPS mandates. Before the law passed, Kansas’ average electricity prices were lower than most other states. This changed within a year of the RPS mandate’s passage. In 2010, our state’s electricity prices surpassed the average for states without mandates of any kind.

They’ve continued to rise. Already, electricity costs us 16 percent more than the national trend from the past five years. Our rates are now on track to completely exceed the national average within the next few years.

We don’t have to let that happen. If Topeka eliminates our state’s RPS mandates, both consumers and businesses will benefit. Surely it’s time to give Kansans a break.

Jeff Glendening is the Kansas state director of Americans for Prosperity.