Good: LPSC approved efficiency programs with increased budgets and savings for low-income families thanks to public pressure.
Not so good: The Commission granted a last-minute utility request for millions of dollars in unnecessary additional costs.
Last Wednesday, the Louisiana Public Service Commission did something great, but few people caught it. In the very same meeting as the widely covered decision to approve a portfolio of Entergy investments to serve a Meta data center, the Commission also finalized a new Energy Efficiency Rule, which will save millions of dollars and kilowatt hours (energy) a year for Louisianans across the state.
The Commission has taken a long and winding road to get to this rule, and the final details still leave savings on the table for ratepayers- but- just a few months ago, it wasn’t clear if there would be any efficiency or weatherization programs outside of Orleans Parish at all. Instead, the new rule will significantly increase the total investments for things like insulation and energy-saving appliances, and will commit at least 15% of the budgets to low-income households. This program will also mean even more workforce opportunities in the efficiency and weatherization space across the state.
LaHouse at LSU offers trainings and certifications for these kinds of jobs.
LAHouseAfter 14 years of frustrating policy negotiations with utilities and other stakeholders, back in January 2024, the LPSC approved a truly transformational program that would have taken implementation out of the hands of utilities and shifted oversight and control to the Commission itself. The Commission then spent over a year conducting requests for proposals to hire a state-wide implementer who had nearly finished designing the programs meant to begin rolling in January 2026. Momentum was building for a successful program, and in March of this year, the Commission also hired an evaluator to review and report back to the Commission on all of the programs. One month later, the Commission voted to end the programs entirely.
The crux of the issue, according to some of the Commissioners, was concern about the cost of administering the programs.
But before the Commission met in April and decided to end efficiency programs altogether, they started hearing from their constituents. We know commission offices were hearing from residents via phone calls and emails, and reporters were reaching out to understand what the commission was up to.
We know this, because only a month later, the Commission reversed itself again, asking staff to put together a new rule that they could vote on in August. This directive outlined a handful of parameters on how the program would look, including an increase in program budgets, a cap on administrative costs, and no requirements for industrial customers to participate.
The new rule has some great features- including a Stakeholder Working Group to help improve the programs as they roll out- and the Commission will maintain evaluation oversight with a single state-wide consultant, rather than allowing utilities to grade their own papers. Additionally, the Commission has now encouraged utilities that have been approved to invest millions of ratepayer dollars to upgrade to “advanced” (or smart) meters to leverage that technology for other bill-reducing, demand-reduction programs.
Exasperatingly, one detail was changed before the Commission took their final vote last week, which will cost residents and businesses millions of unnecesary dollars a year. The Commission’s earlier 2024 rule was set to end the utility practice of charging customers for power residents never bought, officially called “Lost Contributions to Fixed Costs” (LCFC), and sometimes known as “ghost charges.” Most utilities in Louisiana use a “formula” to increase or decrease their rates from year to year if they do not make enough money to cover their costs, including their allowed profit. The Alliance has long argued that since the utilities already have this formula mechanism, there is no need for this additional ghost charge revenue (which added up to $12.8 million on last years bills) and has continued to urge the Commission to limit its use.
In the final minutes before the vote, the Commissioners heard a complaint from Cleco, a utility serving residents in 24 parishes, asking for the maximum amount of this additional revenue. Despite prior recommendations from staff, the Commission granted Cleco’s request, which will add millions of excess costs to bills. We will continue to advocate to resolve this inequity through the Working Group and in Formula Rate Plans.
While the new 2025 rule does not go as far as the Commission’s prior 2024 programs to save money and reduce energy waste, the new rule aligns Louisiana policy more closely with other nearby states like Arkansas, which has had a mature program in place for well over a decade. Thanks to a public outcry over the last five months, all customers of Entergy Louisiana, Cleco, and Swepco will have more programs available to them to reduce their bills, beginning in January 2026. Once more for the Power to the People.
