Louisiana Public Service Commission Opens Path for Commercial and Industrial Access to 500 MW of Renewable Power – SolarQuarter

In a significant move to bolster renewable energy access, the Louisiana Public Service Commission has introduced a new rule allowing large commercial and industrial customers to tap into up to 500 megawatts (MW) of renewable power. This decision is driven by the need for these customers to remain competitive in their respective markets.

Currently, Louisiana has a solar power capacity of 600 MW, which contributes to less than 1% of the state’s electricity, according to the Solar Energy Industries Association.

Monika Gerhart, Executive Director of the Gulf States Renewable Energy Industries Association (GSREIA), expressed optimism about the rule. “Our member companies are greatly encouraged by this consumer-driven demand for renewable energy expansion,” she stated. GSREIA, along with several other stakeholders, actively participated in the four-year regulatory process that culminated in this rule.

The new regulation introduces a “sleeved” power purchase agreement (PPA) as an option for large electricity customers. This agreement allows customers to negotiate directly with renewable energy generators for capacity, energy, and renewable attributes, with the agreement subsequently executed by the customer’s utility.

This rule adds an alternative to the standard PPA option. For instance, McDonald’s has established two PPAs with Lightsource bp to procure solar power from Louisiana projects: one for the entire output of a 180 MW project and another, in collaboration with eBay, for part of the output of a 345 MW project.

Upon notifying their utility of the intent to seek a sleeved PPA, customers will prompt the utility to design a rate schedule within 60 days and propose it to state regulators, who then have 90 days to approve or deny the proposal.

The proposed rate schedule must specify customer charges and credits for a sleeved PPA, typically including a credit for the accredited capacity provided by the renewable generator.

The rule limits the maximum renewable capacity eligible for sleeved PPAs to 5% of each utility’s peak summer demand. For instance, Entergy Louisiana, the state’s largest utility, recently recorded a peak summer demand of nearly 10,000 MW. Therefore, up to 500 MW of renewable capacity (5% of 10,000 MW) would be eligible for sleeved PPAs for Entergy Louisiana alone.

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