Louisiana regulators could give the green light to utilities to milk customers with solar

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Update September 9, 6:28 PM EST: Documents seen by pv magazine indicate that the position that the LPSC will be voting on, on Wednesday September 11, will be a by-all, sell-all arrangement with PV system owners compensated at avoided cost rates. Additionally there will be 15 years of grandfathering under the old policy, not five. This article has been changed to reflect these changes, and a full examination of the new policy proposal was published on September 10.

 

If there are two things that Louisiana politics are known for, they are blatant corruption and domination by the oil and gas industry. And on Wednesday, these two trends could come together to put more nails in the coffin of the state’s rooftop solar industry, and also penalize those customers who have installed solar under previous policies.

The Louisiana Public Service Commission (LPSC) is preparing to vote on Wednesday September 11 on a draft rule prepared in January (notes by Energy and Policy Institute), which would dismantle the state’s net metering program.

The proposal would also require that all net generation exported back to the grid be compensated by the utility at “avoided cost” rates, meaning something more akin to wholesale power than the retail that customers pay. This would be under a buy-all, sell-all arrangement, unlike the monthly “netting” of the import-export balance that net metering policies provide.

The new rules would also give only fifteen years of “grandfathering” under the old rules to customers with behind-the-meter solar.

 

Cooking the books

The justification for these attacks on net metering can be found in an assessment of the state’s policy by David Dismukes of Acadian Consulting and the LSU Energy Center, a consultant who has been a darling of the state’s oil and gas industry and who was appointed to Acadian Consulting in 2017.

LPSC’s use of Dismukes to write the formal review of this policy has been protested by advocacy groups including Alliance for Affordable Energy, and unsurprisingly, this report was even more biased to utility interests than many of the reports paid for by utilities that pv magazine staff has seen to date – Dismukes’ previous work notwithstanding.

The report includes such gems as Dismukes including lost utility revenue as a cost imposed by net metered solar, as well as a category for “legislative costs” associated with net metering (for a full analysis of the report and Dismukes’ role, we must refer you to this recent analysis by Energy and Policy Institute).

It is notable that Dismukes’ analysis that net metering is a net cost for Louisiana is consistent with studies written for utilities, but wildly out of line with other studies funded by legislatures and other state regulatory bodies.

It is particularly notable that, according to Dismukes’ own report, rooftop solar meets only 0.12% of electric demand in Louisiana, many times less than the national average. While utility SWEPCO in its testimony brought out the utility canard of a “cost shift,” many studies have shown that if there are costs imposed by net metering on non-solar customers, it only occurs on grids where solar meets more like 10% of demand.

But as Dismukes’ inclusion of lost revenue shows, this ultimately isn’t about protecting other utility customers; it is instead about protecting the state’s utilities from lost revenue. Furthermore, this new attempt to kill the state’s rooftop solar market is coming as previous policy changes – including the end of a lucrative state tax credit – have already shrunk the market to a small fraction of its peak.

 

Editor’s note: The author is a former employee of Alliance for Affordable Energy