Louisiana PSC Commissioner wants to allow corporates to contract their own energy projects

In an interview with NPM, Louisiana PSC commissioner Davante Lewis discussed the state’s push toward renewable energy and his desire to open up the state’s market to allow corporates and industrial customers to contract their own renewable energy projects outside of the purview of utilities.

Although the state has made significant strides over the last 18 months toward renewable energy as utilities like Entergy have significantly grown their capacity targets, Lewis laments the fact that renewable generation currently only makes up about 3 percent of the state’s total energy mix. To combat this problem, he says he is supportive of a pending docket to open up the state’s energy market to allow industrial users to build renewable facilities at cost and provide excess energy back to the grid.

If implemented, this would be a dramatic policy change in the state that would put it closer in line to neighboring Texas where developers are able to build projects and shop around for PPAs, rather than working exclusively with vertically integrated utilities and cooperatives in Louisiana. Ultimately, Lewis says he believes opening up markets in this way would lower the cost of energy in the state and significantly increase renewable development as the state seeks to hit targets outlined by Governor John Bel Edwards.

“A utility has the right to make a profit, but I don’t think they have an exclusive right,” Lewis said. “A lot of renewable developers don’t mind assuming the risk of building projects that are not rate-based. At the end of the day, if I can provide renewable energy at a lower cost than what the utilities are able to provide, I should do it. And I am.”

That said, Lewis says the state will have to be choosey when branching out to projects outside of the typical onshore wind and solar developments. For instance, as the state ramps up efforts to bring offshore wind to state waters, Lewis says there are some feasibility questions regarding affordability, interconnection, and hurricane and related insurance concerns that he’s going to need to see answered before he can support any of these projects.

For instance, Lewis notes that hurricane wind speeds are stronger at higher altitudes, but they are traditionally only measured at ground level. That creates a sense of unknown about exactly how strong wind speeds can reach at the peak height of an offshore wind turbine. And while he says a potential solution is simply decreasing the size of these turbines, that would result in a hit on efficiency and cost.

“We also need to talk about insurance risk,” Lewis said. “Who’s responsible for a turbine when it falls apart and washes up onshore? Who recovers those costs? There are some real procedural and practical questions we need to answer before we can definitively say whether offshore wind belongs in the Gulf.”

With solar pricing on the rise, Lewis says the state will have to be open to the potential for the construction of new natural gas projects, which is being pursued by utilities like Entergy as dispatchable generation on top of renewable builds. However, Lewis says he is less open to carbon capture projects, which companies like FuelCell are pursuing in the region.

Lewis says his chief concern with carbon capture is what he calls the “unproven nature of the technology” combined with cost concerns of building these facilities on top of already existing projects.

“We’re not talking about reforming existing facilities, we’re talking about building onto them,” Lewis said. “That’s going to raise electricity costs. So, what’s the trade-off?”

On the other hand, Lewis says he is optimistic about storage, which is currently largely non-existent in the state. While he notes progress in Louisiana has been much slower than in other states like neighboring Texas, he says this isn’t necessarily a surprise considering the relative lack of renewable penetration in the state.

“We’re only just catching up on solar deployment,” Lewis said. “It’s hard to advance to the next level when you’re still on level one.”

For now, Lewis says he expects the vast majority of Louisiana’s near to mid-term storage developments to be smaller projects that would be paired with community solar and tied into what he calls resiliency hubs or local areas in hurricane-prone South Louisiana that would need to maintain power in extreme weather situations. He says this could include anything from community shelters and hospitals to local churches.

“Tying storage into community solar and resiliency hubs is a conversation we’re increasingly having in South Louisiana, which I represent,” Lewis said. “As these storms get stronger, reliability is increasingly important, which is causing us to look harder at the benefits of battery storage.”

*This story was originally published exclusively for NPM subscribers last month.


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