By Tim Carpenter and Morgan Chilson, Kansas Reflector
TOPEKA — Owners of the Bowersock Mills & Power Co. relied on federal renewable energy tax incentives to expand production at the Lawrence hydroelectric plant that’s been drawing power from the Kansas River for more than a century.
Sarah Hill-Nelson, CEO of the facility, said tax benefits designed to encourage growth of alternative energy production projects — now threatened by Congress — were essential to upgrading one of the oldest hydroelectric plants west of the Mississippi River nearly 15 years ago.
“We issued $25 million in debt to expand,” she said. “We were able to triple the amount of energy we produce on an annual basis. Do we have aspirations to expand? Absolutely.”
Hill-Nelson said incentives that made a difference at Bowersock were comparable to investment and production tax policies targeted in U.S. House and U.S. Senate legislation drafted by Republicans to conform with President Donald Trump’s political agenda. In May, the House passed its version of the One Big Beautiful Bill Act on a vote of 215-214. The Senate is preparing to vote on its bill.
Both would undermine U.S. alternative energy companies, threaten jobs and make it difficult to meet growing domestic demand for electricity, Hill-Nelson said.
Her opinion stood in contrast to Trump’s recent post to social media: “None of it (green energy) works without massive government subsidy.”
She said the president didn’t have a clear understanding or was misled about the extent to which U.S. fossil fuel companies benefitted from federal energy incentives, including tax breaks, lease and royalty agreements or funding of research. The International Monetary Fund reported fossil fuel subsidies in the United States reached $757 billion in 2022.
Hill-Nelson took part in a media briefing Tuesday hosted by the Business Council for Sustainable Energy and its subsidiary, the Clean Energy Business Network, to highlight how the House-passed budget bill would raise household energy spending in Kansas by an average of $210 per year in 2030 and by $670 per year in 2035.
The industry associations said the House budget bill supported by Kansas’ U.S. Reps. Derek Schmidt, Ron Estes and Tracey Mann would result in loss of an estimated 9,700 jobs in Kansas within five years and nearly 10,000 jobs in a decade. The package would shrink annual gross domestic product in Kansas by $1.9 billion by 2035, the associations said.
“Companies rely on long-term business certainty in the tax code to plan projects and allocate capital,” said Lisa Jacobson, president of Business Council for Sustainable Energy in Washington, D.C. “As we face an era of unprecedented energy demand growth, now is not the time to disrupt the market by making unnecessary changes to the tax structure.”
Lynn Abramson, president of Clean Energy Business Network, said deliberations in Congress about withdrawal of tax credits for alternative energy development had already damaged small businesses nationwide.
Businesses in Kansas and elsewhere built on federal laws making energy tax credits available into the 2030s should be given a smooth transition away from those incentives, she said.
Mark Horst, owner of the residential and commercial solar installer King Solar in Hutchinson, said Congress appeared willing to quickly phase out a 30% tax credit for residential rooftop solar projects. If the plug were pulled on the tax credit at the end of 2025, he said, the change would break consistent growth his company had experienced over the past 20 years.
“We would probably have to cut at least 60% of our workforce in about a year,” Horst said.
Residential customers were certain to change buying decisions if the tax credit for installing solar on their homes goes away, said Malcolm Proudfit, CEO of Good Energy Solutions of Lawrence.
The majority of Good Energy’s customers were contemplating deployment of solar from a cost-savings perspective, he said.
“The tax credit plays a key role in either reducing their overall net cost for the system if they’re paying for it outright or for those that finance their systems,” he said. “Then you apply the tax credit to your personal taxes for the year and that ought to get some kind of a return or tax refund.”
In the Senate proposal, the tax credit for solar panels on rooftops would end 180 days after the bill passed, Proudfit said.
Justin Grady, utilities director for the Kansas Corporation Commission, said elimination or change to federal clean energy tax credits could affect the Kansas Sky solar facility proposed by Evergy that would be located in Douglas County.
Evergy’s solar complex would have the potential to meet criteria for the full tax credit, Grady said, noting that Evergy had contracts lined up and fixed-price agreements for buying solar panels.
“But if those tax credits go away, it will obviously meaningfully affect the price of the power purchase agreements that utilities might otherwise take advantage of for any renewable energy facility that utilities in Kansas decide to build,” he said.
He said the Senate bill, which is still under development, allowed projects beginning construction in 2025 to receive 100% of a federal tax credit, but projects launching in 2026 would receive 60%. It’s unclear what “beginning construction” means, he said, as it could define the simple movement of dirt or incurring no more than 5% of qualified costs.
Joseph Astrab, consumer counsel for the Citizens’ Utility Ratepayer Board, which advocates for residential and small business ratepayers before the KCC and Legislature, said utilities must determine the best way to meet energy needs in the context of affordability and reliability.
He said cuts to federal incentives transforming the energy-generation mix, such as whether electricity was supplied by natural gas, wind or solar, would force utilities to overhaul those plans.
“It’s always been thought, well, solar and other renewable resources will have this tax credit available at all times, so it’s been built into the analyses,” Astrab said. “So, if there’s a shift where a lot of that goes away for new projects, then that may impact how the utilities review that and what they bring to the commission.”
Laura Thompson, president of Overland Park-based FlowEnergy, said discussion in Washington about phasing out energy tax credits led to a slowdown in the company’s business of supplying schools, universities and commercial property owners with hardware and software to better manage energy usage.
She said tax credits were an important opportunity for property owners to speed the payback from energy-saving investments.
“Right now,” she said, “the projects in our pipeline are on hold or have significantly slowed. This isn’t good because our projects not only provide jobs for our own technical and services staff, but also for the construction and engineering firms that we’re subcontracted to to execute these projects.”
Dorothy Barnett, executive director of the nonpartisan Climate and Energy Project, offered a personal example of how loss of federal tax credits for adoption of energy efficient building methods meant.
She said her daughter needed a new roof on her home because of storms in the Kansas City area. If she installed an Energy Star roof, Barnett said, she could receive a $1,200 tax credit under existing federal law. The U.S. Senate bill would end that tax credit.
“We have spent the last three years really building up a pipeline and an opportunity to work with Kansans on energy efficiency upgrades and retrofits to help people affect their utilities. In a pen swoop, all of a sudden, we’re not getting our grant money for those programs,” Barnett said.
