Governor Cans Efficiency Kansas Program, Diverts $22 million to Big Ag Projects

The Efficiency Kansas program was to be a revolving loan program available to most Kansans to weatherize and upgrade their homes to save energy and increase comfort.  The program was also open to tenants and landlords and sought to train more home energy auditors to meet the increased need.  The audits would be subsidized such that the cost to the homeowner would only be $100, and the loan payments would be offset by lower utility bills.

Banks and utility companies were to receive funds from the state at 0% interest, and lenders would receive a $250 rebate for administrative costs.  The whole thing was to be financed by some $38 million in stimulus funds awarded in April, 2009 by the US Department of Energy.  A real win-win proposition all around!

Governor Parkinson launched the program on November 17, 2009.  Training for auditors was initiated in January of 2010.  The program ultimately attracted some 138 implementing participants from all over the state including auditors, contractors, banks, credit unions, cities, electric coops, and the major utility companies, BPU, Westar and Midwest Energy.  The program began to pick up speed after the big utilities joined.  Then on July 20, 2011 these folks received a letter from the Kansas Energy Office, a Division of the Kansas Corporation Commission, which was supposed to be managing the program.  This letter began as follows:

“In November 2009, the Kansas Energy Office announced the launch of Efficiency Kansas.  Today, Efficiency Kansas continues to be one of the most innovative energy efficiency loan programs in the country.  The program saw the creation of a residential energy-efficiency industry consisting of energy auditors, contractors, banks and utilities working together to make Kansas homes comfortable, affordable and safe.  We thank each of you for your hard work and support during the creation and implementation of the program.  “

The hammer falls.  Then they said that the KCC and Department of Commerce “were directed” to reallocate funding to some renewable energy projects, and that the program would run out of funds “in the next several weeks.”  The reason given was that the remaining funds in the DOE grant could not otherwise be expended by the March 31, 2012 deadline.  Program managers claimed they would try to keep the EK program going with alternate sources of funds, but BPU and Westar immediately ceased their participation.

What happened!  Christine Metz of the Lawrence Journal World ran a series of articles on this fiasco.  Some $22 million was diverted to three biofuel-related projects:

—  $12 million for methane production from cattle feedlot manure;

—  $4.56 million for biomass harvesting and transportation equipment, and

—  $5 million to convert all of QuikTrip’s 38 retail gas stations in Wichita so they can dispense high ethanol–gasoline blends for “flex-fuel” vehicles.

Many questions.  If the KCC and Department of Commerce “were directed” to do this, then it must have been the Governor’s doing.  The biggest question is why did they have to divert all the funds now?  Why not leave enough to fund the program through March 31, 2012.  Another big question is… how can they claim to keep a revolving loan program going over the next 10 to 20 years when there will be so few funds in the kitty to revolve?  Finally, why did they pull the rug out from under the program participants with no warning and without giving them a chance to help work out a better solution?

The Kansas Chapter has filed a Freedom of Information Request with the Department of Energy and an Open Records Request with the Kansas Corporation Commission.  A lot of people have been hurt by what appears to be an arbitrary and irrational decision.  We plan to issue more information on this debacle as it becomes available.

New Development: As this article was going to press the Quik Trip ethanol project recipient decided they didn’t want their $5 million grant, so $3.5 million was added to the biomethane project and $1.5 million was given back to Efficiency Kansas.  It will be used to process about 150 applications that had been left hanging.  More on this in the next issue of Planet Kansas.

By Craig Volland

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