LPSC Adopts Voluntary Energy Efficiency Rule

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The Louisiana Public Service Commission on August 21 adopted a voluntary Energy Efficiency (EE) Rule. Adoption of the rule came over strong objection from two commissioners Clyde Holloway and Erik Skrmetta. Supporting votes came from Commissioners Foster Campbell and Lambert Boissiere. The key supporting vote was from Commissioner Scott Angelle who had put forward amendments to the EE rule which was adopted back in Dec 2012 but which had been put on hold pending further study. Commissioner Angelle’s idea this time was to adopt a voluntary rule and at the same time obtain verbal assurances in the commission meeting from representatives of CLECO, Entergy Louisiana, and SWEPCO that their companies would participate in the program.

Coverage of the rule was extended beyond just the big investor owned utilities to include electric coops and gas utilities regulated by the Commission. Utilities must formally notify LPSC by Oct 1, 2013 of their intention to participate and then would develop and implement an initial set of Quick Start EE programs. According to the adopted rule EE programs should begin offering services to electric customers starting Oct 1, 2014. The adoption of this voluntary rule is a major victory for advocates of clean energy in Louisiana.

We had an EE rule in Dec 2012 with the vote of departing Commissioner Jimmy Fields. In Feb 2013 the Commission vacated the rule and it looked like we might end up with nothing. Sierra Club, Alliance for Affordable Energy and LEAN filed a lawsuit challenging the vacating of the rule because Commissioner Skrmetta had refused to hear public comment. The groups then made an agreement with Commissioner Skrmetta to put a hold on the lawsuit if he would re-hear the issue. The Commission reversed the order to vacate but then put a hold on implementation of the rule, and that is the way it stayed until the August 21 commission meeting. The successful outcome did not come without a vigorous effort with AAE, Sierra Club and others making phone calls and bringing public pressure to bear on the Commissioners.

Commissioner Angelle became deeply engaged, expending significant effort to come up with the compromise of a voluntary rule. We have to give Commissioner Angelle credit for listening to our concerns and for referencing the report on EE potential in Louisiana that had been presented by the American Council for an Energy Efficient Economy (ACEEE). Credit for this success on our side goes to Forest Bradley Wright of Alliance for Affordable Energy. He was the lead negotiator for all of us who are advocates for clean energy in Louisiana. This positive development does not come without risks. The Sierra Club position is that we still advocate for a mandatory rule on a par with rules in Arkansas and Mississippi. We said so in a public statement at the August 21 commission meeting. Forest Wright for AAE said he is “skeptical” (about the voluntary provision) but expressed hope that this would move us toward the goal of energy efficiency. All will depend on the details of the plans that will be submitted by the utilities. We will have to watch closely as the commission reviews those plans. We note however that the state of Oklahoma has had voluntary targets for renewable energy in utility portfolios for many years and the utilities have consistently exceeded their targets. A voluntary program for Energy Efficiency could work in Louisiana because utilities will recognize that they will look pretty bad if they do not act on their verbal promises to implement EE programs. Utilities will obviously want to play a positive public relations angle with EE programs but that just helps build public acceptance of EE and clean energy in general.

So who pays for this and who benefits? Utilities will be allowed to charge program costs to their rate base. According to the ACEEE report that could amount to 47 cents per month additional on a residential bill and $5.41 per month additional on the average commercial account if we had implemented a mandatory EE requirement. The numbers may change with the voluntary program but it sure looks like a good deal for a homeowner or business when compared to the long term savings that come with EE programs. If EE is successful in Louisiana the utilities won’t sell as much power, but they won’t have to build as much new generation capacity or import as much energy. That should result in lower electric bills for everybody.

So where do we go from here? We will have to pay close attention to the EE and cost recovery plans proposed by the utilities. Regulated utilities are guaranteed a rate of return anyway. We just need to make sure it is fair. We really need to quit fighting with the LPSC about Energy Efficiency, the Renewable Portfolio Standard and Net Metering etc as separate issues. We need the legislature to start working on a statewide energy policy that sets targets for reduction in energy use and for conversion to renewable energy. The policy should recognize the link between climate change and the survival of our coast. The policy should move Louisiana away from the use of out of state coal and toward the use of locally available sources of energy. Such a move would keep dollars expended for energy circulating in our state and would stimulate job growth in local clean energy related industries.

And the Louisiana Public Service Commission needs to figure out that the words “Public Service” in their title mean that they are supposed to represent us and are supposed to be providing a service to people in Louisiana. The state’s economy and image could benefit greatly from a Commission that actively participates in and encourages the diversification and localization of our energy mix.

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