By Jessica Hendricks, AAE's State Policy Director
Verdant is a microgrid company with no existing ties to LA. Ingevity and Verdant teamed up and drafted a plan whereby Verdant would build a microgrid, consisting of 1000 kW of solar, 2000kW of Combined Heat & Power (CHP) and a heat recovery steam generator (“HRSG”) on Ingevity owned property. Verdant would then sell the power solely to Ingevity, and Ingevity would continue to rely on Cleco Power for 10-20% of its electric load.
For any newcomers here, this is a very significant ask! Ingevity appears to be attempting to quietly leave its jurisdictional utility in a step towards deregulation. The application argues that Verdant would not be a public utility and therefore not subject to LPSC jurisdiction. Should Ingevity be able to opt out of Cleco Power, are other customers on the hook for paying for Cleco generation that is no longer needed by an industrial customer? If this is allowed, what other industrial customers will do the same?
For folks following resilience efforts, denying this application could pose significant implications in the development of solar + storage and localized microgrids in the event of power outages. Why shouldn’t someone be allowed to use power produced on their own property? Are our Investor Owned Utilities (IOUs) the only entities that can construct microgrids, and solar + storage projects? This seems to be in direct conflict with the spirit of the LPSC Resilience Rulemaking (R-36227) whereas the Commissioner that opened the Docket envisioned resilience planning with multiple stakeholders in a forum that would allow for proposed solutions from entities that are not utilities.
I’m not going to go through the legal arguments made in this case but feel free to read the Administrative Law Judge’s (ALJ) Recommendation. Spoiler alert, she recommended that the Commission deny the application. Here’s the hook- Verdant’s “primary” function is the generation, distribution and sale of electricity, making them a public utility, subject to LPSC jurisdiction regarding rates and fees. Since Verdant is not consuming the electricity, nor selling it to Cleco, the exemptions do not apply. Take note microgrid and solar + storage implementers. The structure matters!
Interestingly enough, the ALJ abstained from ruling on the 300 ft. Rule, which addresses the sale of electricity from a non-LPSC jurisdictional supplier within 300 feet of a regulated utility’s service territory. Since it was determined Verdant would be subject to LPSC jurisdiction, that point is irrelevant. Also deemed irrelevant was Cleco’s reliability. HOWEVER, The ALJ dropped a great little nugget. “Commission Order dated October 6, 2005 (R-28269) provides that “any consumer receiving electric service from an electric public utility which is subject to the jurisdiction of this Commission who feels aggrieved with the reliability of electric service being received by him/her may apply to this Commission for an order directed to his/her present supplier to show cause why the consumer should not be released from said supplier.”
Just another fun way to engage at the LPSC!
As previously mentioned, this Docket has stalled out. Following the ALJ Recommendation, Verdant & Ingevity have filed, and been granted, two Motions to Stay indicating that they will be filing an amended application with a restructured energy service agreement between Verdant and Ingevity. So this has not come to a Commission vote, and I am going to be on the edge of my seat, waiting for that amended application to see just how we can bring power to the people.
Photo credit: Ingevity