Renewable Energy Pilot Program

Summary

In June 2010, the Louisiana Public Service Commission (LPSC) unanimously approved a Renewable Energy Pilot Program to determine whether a renewable portfolio standard (RPS) is suitable for Louisiana. The program was concluded in August of 2013 with the determination that, while utilities, staff, and regulators learned a great deal, a mandatory RPS was not needed in Louisianna. Three major reasons given not to pursue an RPS were 1) that renewable energy generation is more expensive than conventional energy generation, 2) that rising natural gas prices have put renewables at a cost disadvantage, and 3) that federal interest in mandatory RPS goals appeared to be limited at the time.

The pilot program has two major components: the Research Component and the Request for Proposal (RFP) Component. The RFP component has been concluded but companies continue to report in Docket No. R-28271 Subdocket B. Each utility is required to submit an annual report that includes: the status of federal renewable energy policies and best practices in other states, recent renewable energy technology developments relevant to Louisiana such as capital cost reductions, an update of renewable resources acquired through the program, and a description of serious discussions the utilities have with renewable energy developers.

Research Component
The Research Component of the pilot program provides an opportunity for utilities to collect data on the feasibility of different renewable energy resources. Under this component, each investor-owned utility must develop a minimum of three projects. There are two options for the projects, and utilities may pick any combination of the two options. Projects must be fully operational by the end of 2013.
 

1. Option 1: Self-Build Options for New Renewable Resources
   Utilities may build their own renewable energy facilities. Each individual project is generally limited to 300 kilowatts (kW), but one project may be up to five megawatts (MW).
    
2. Option 2: Standard Offer Tariff Option for New Renewable Resources
   Under this option, utilities must develop a tariff and an associated contract to purchase renewable energy. In order to qualify for this tariff, developers must deliver energy from a new renewable resource. Utilities may not purchase more than 5 MW from any single project, and may not purchase more than a total of 30 MW of nameplate capacity. The amount of the tariff will be $30/megawatt-hour (MWh) plus an avoided-cost payment (as defined in LPSC General Order No. U-22739) for a maximum of five years. After the five-year contract, the developer will continue to receive the avoided-cost payments.

RFP Component
The RFP Component applies both to investor-owned utilities and cooperative utilities. Utilities must issue RFPs for new, long-term renewable resources that will come online between 2011 and 2014. In total, the utilities will request a combined maximum of 350 MW. Each utility's portion of the 350 MW will be determined based on 2009 retail sales. The contract awarded through the RFP will have terms of 10 to 20 years. Award winners that supply renewable energy to investor-owned utilities must deliver at least 2 MW, and those that deliver to co-ops must deliver at least 1 MW.

See the implementation plan for additional rules and reporting requirements.