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Louisiana’s Energy Regulator Mandates Economic Assessments from Renewable Providers

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Additional green initiatives from “Big Green Easy” New Orleans take root

NEW ORLEANS, La. – Between now and 2014, utility companies participating in a renewable energy pilot program must address operating costs, logistics, fuel availability, and potential job losses before certification from the Louisiana Public Service Commission. All LPSC regulated utilities and electric cooperatives are included.

Renewable energy sources in the LPSC program include biologically derived methane gas, biomass energy, black liquor, distributed generation systems, fuel cells, geothermal energy, solar thermal energy and wind power. And the renewables pilot program requires research and “request for proposal” components.

Entergy Gulf States of Louisiana (EGSL) and Entergy Louisiana (ELL) are required to seek 233 megawatts of the 350 MWs that have been reserved for the program. Some LPSC regulated energy providers have received limited waivers, such as CLECO, which is weighing the cost of co-firing biomass at its Madison 3 facility. (Co-firing enables the simultaneous combustion of two materials, and it enables existing plants to burn fuels considered environmentally friendly.)

The research component seeks data collection on renewable efforts that are potentially beneficial to Louisiana over the long term. The LPSC asks participants to submit written statements that explore the practicality of hydrokinetic energy and other technologies that may not be commercial viable at the present time.

Theoretrical technologies will be excluded from the research phase until they can achieve some level of operational capacity. By contrast, the RFP component focuses on existing technology that can be expected to come online within the 2011-2014 time-frame. Participants must also disclose the costs associated with renewable efforts to the commission as part of an extensive economic evaluation.

“The Commission may ultimately decide that a long term [renewables program] is not appropriate for the State of Louisiana,” says Melanie Verzwyvelt, a staff attorney for the LPSC. Commission members also have the ability to deny certification to a particular project if it proves too costly well before the pilot period expires in 2014, she added.

On the local level, New Orleans remains at the focal point of energy efficiency initiatives that seek to alleviate carbon emissions. New Orleans Councilwoman Susan Guidry, for example, has partnered with the Alliance for Affordable Energy to advance the “Energy Smart” program, which offers financial inducements to residents and business owners in exchange for making investments into “high efficiency” products. The city council approved the program during its previous term as a way to curb energy use and lower greenhouse gas emissions.

“Councilwoman Guidry and the Alliance for Affordable Energy are very much partners,” Deborah Langhoff, her chief of staff, explains. “Now that the program has been passed she is working with the Alliance to take the next step.”

Although rebates are promised to participating homeowners, Ginger Sawyer, vice-president of the Louisiana Association of Business and Industry (LABI), is less certain of the economic benefits.

“I don’t see the residential consumers benefiting from these arrangements… you have to keep in mind that similar programs have gone by the wayside and are now subsidized through federal grants. They are just not economically viable.”

Sawyer said she is not opposed to experimenting with renewable energy, but it would have to be as part of a pilot program that safeguarded consumer and taxpayer interests.

“We have a long-standing position of opposing mandates, which we know to be costly” Sawyer said. “But a pilot program is another matter so long as it does not include subsidies that are passed onto the public.”

Kevin Mooney is an investigative reporter with the Pelican Institute for Public Policy. He can be reached at

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