Louisiana’s Renewable Energy Pilot Program

In 2010 the Louisiana Public Service Commission unanimously approved a Renewable Energy Pilot Program (REPP) that ordered utilities to conduct research, requests for proposals from the renewables industry, and submit reports to the commission on their viability. The main goal of the program was to gather information about the availability and economic feasibility of renewable resources in the state, and whether Louisiana should join the 32 other states and territories who have Renewable Portfolio Standards (RPS). These standards are regulations that require increased production of renewable resources, generally with future goals of including greater percentages of renewables in their fuel mixes. In 2009, Commissioner Lambert Boissiere had requested the staff’s interest in Louisiana’s resource planning be “re-energized” after a 5 year conversation, beginning in 2004, about a potential RPS. The commission’s instituting of the REPP was a response potential federal regulations, following presentations on renewables in Washington. Interest in renewables at the time was multi-faceted, and aside from potential federal action, Commissioners and the energy industry were responding to high and rising oil and gas prices, concerns over energy independence and security, aging power plants, and job creation goals in the state. From 2010 through 2013 the three largest utility companies in Louisiana, Entergy, Swepco, and Cleco participated in the Pilot Program by performing research, and reaching out to the growing renewable energy industry in the form of requests for proposals (RFP). The two components, 1) research, and 2) requests for proposals, were fulfilled in different ways by the companies. Cleco performed research in conjunction with the University of Louisiana at Lafayette, and took an exception to the RFP component by studying the use of woody biomass in their existing Madison 3 plant. Entergy and Swepco’s research was fulfilled through offering a “standard offer tariff” to small-scale renewable generating companies. They both performed requests for proposals, with Entergy making an agreement with Lafourche Sugars, and Swepco purchasing wind energy from Flat Wind 2 Energy Company in Kansas In August, 2013, the Commission closed the program, declaring that Entergy, Swepco, and Cleco had complied with the requirements of the Pilot Program. They ordered that the small project “standard offer tariff” continue to be available from Entergy and Swepco, even raising the maximum amount of energy allowed under these agreements, and that Cleco be allowed to continue its research. Based on the recommendations offered by their staff and reports submitted by the utilities, commissioners Skrmetta, Holloway, Boissiere, and Angelle decided there was no need for Louisiana to implement a Renewable Portfolio Standard, but to continue to gather information from utilities’ annual reports on federal policies in development and best practices in other states. Commissioner Campbell objected to the closing of the pilot program, and also objected to an otherwise unanimous decision that Cleco had fulfilled its responsibilities to the Program. It is clear that some of the factors that lead the commission to discuss more renewables in the state’s energy mix back in 2010 have changed. Prices of natural gas, which have plummeted during the shale gas boom in recent years, have made energy in Louisiana much cheaper than expected. Conversations at the federal level about regulation that were on the table just a few years ago have cooled considerably. Unfortunately, these elements have staunched the enthusiasm for growing the renewable industry in Louisiana’s strong oil and gas economy. Following this closure of the Pilot Program, Louisiana’s best bet for the growth of renewables lies in small-scale generation and sales via the “standard offer tariffs” available through Entergy and Swepco. These agreements are ways for small merchant generators to contract with the utilities to generate energy (as much as 15 MW per project), and sell it to the utilities at a rate slightly more than the utility’s costs of production (or avoided costs). These agreements, used in other states and countries, have proven to be effective ways to rapidly develop renewables. Sierra Club members who are interested in being involved in the future of renewables in Louisiana can support the growth of the industry by staying in contact with their regional Public Service Commissioners. Conversations are continuing on the state’s net-metering policy, as Co-op utilities around the Louisiana are beginning to claim they are no longer required to purchase power from residential customers with solar panels, according to the maximum amounts required by the commission’s rules. Net-Metering and Standard-offer tariff policies are similar, and by supporting the residential programs, we can continue to show interest in renewable policies on a larger scale. Logan Atkinson, Alliance for Affordable Energy

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