Alliance for Affordable Energy
  • Home
  • Who
  • What
    • Consumer Protection and Education >
      • Regulate Our Pipelines
      • Health Impact Assessment
    • Clean Energy >
      • Renewable & Clean Portfolio Standard
      • Transmission
    • Energy Efficiency >
      • EEFA
    • GS4GND
    • Past Work
  • How
    • New Orleans City Council >
      • Council Actions
    • New Orleans Dockets >
      • UD-22-05 Hurricane Ida Costs
      • UD-22-04 Demand Solutions
      • UD-22-03 Battery Storage
      • UD-22-02 100% Renewable
      • UD-22-01 Storm Reserve
      • UD-21-03 Resilience
      • UD-21-02 Zeta Cost Recovery
      • UD-21-01 Winter Storm Uri
      • UD-20-02 IRP (2021)
      • UD-19-01 RPS
      • UD-18-07 ENO Rate Case
      • UD-18-02 EV Charging
      • UD-18-01 Smart Cities
      • UD-17-04 Reliability
      • UD-17-03 IRP (2018)
    • LA Public Service Commission >
      • LPSC 2022 Election
      • Engage with the LPSC
    • Lawsuits & Appeals
    • Climate Initiative Task Force
  • News
    • The Watchdog
    • People's Power Hour
    • MISO Soup
    • Hurricane Ida
    • Events Calendar >
      • AAE House Party
  • Learn
    • Glossary
    • Timeline
    • Reports
  • Get Involved
    • Support
    • Newsletter
    • Intern and Volunteer >
      • Wimpelberg Intern Fellowship
    • Contact Us

The Watchdog

A blog on energy matters in Louisiana!

This Crazy Trick Could Help New Orleans Utility Customers Save Money

6/5/2019

1 Comment

 
JOSEPH DANIEL, SENIOR ENERGY ANALYST - Originally published on Union of Concerned Scientists blog
Picture


Over the past year or so, a lot of states with renewable portfolio standards (RPS) have opted to double down on that policy mechanism to set a path to 100% clean electricity. However, most jurisdictions in the deep south have been reticent to pass such policies. That might change later this year, as the City of New Orleans considers passing an RPS. And that’s the crazy trick that could save customers money. Passing an RPS.  

I’m not saying that an RPS will guarantee more affordable energy; but, by passing a 100% renewable portfolio standard, the city of New Orleans has the opportunity not only to help reduce carbon emission but also make electricity more affordable for its residents.

I had the privilege to work with the Alliance for Affordable Energy in drafting technical responses to questions posed by the city council—which also serves as the local utility regulator—about the cost complying with an RPS. A copy of the comments can be found here. There are two important takeaways I wanted to share:

 Protecting New Orleans’s electricity consumers  
While state-level RPS policies have proven to be an affordable driver of new renewable energy development, the best policies feature strong consumer protections to help ensure that people can still pay their electricity bills. Nationally, one in every three Americans struggle to pay their energy bills, and that burden is three-times greater on low-income households.

Income inequality plagues New Orleans. Any increase in energy bills could be devastating. As a result, the Alliance for Affordable Energy has suggested some sound strategies for protecting New Orleans’ most vulnerable power consumers as the city seeks to transition to a renewable energy economy. These recommendations include:
  • Exemption for all low-income households from any RPS rider;
  • A special carveout for renewable resources located at low- and moderate-income households;
  • A mandate that excess credits, or RECs, will be sold, and those revenues will be used to offset REC procurement costs or to fund energy efficiency and renewable procurement;
  • Requiring that utility investors (not ratepayers) will have to bear the costs if the utility doesn’t comply; Recommending an increase in energy efficiency funding and targets, to ensure that reduced electricity consumption (and therefore reduces customers’ bills);
  • Allowing low-cost renewables (such as utility-scale wind and solar) from neighboring states to count towards a portion of the RPS goals; and,
  • A call for the utility to wean itself off above-market, affiliate-contracts.

That last one is important…  

What is New Orleans’s utility up to with customer’s money?  
New Orleans is served by Entergy New Orleans LLC (ENOL) which is owned by Entergy Corp. If you follow energy utilities like I do, you may recognize ENOL’s name from the infamous antics they pulled: pretending to be New Orleans community residents in an underhanded attempt to trick New Orleans City Council into building a new, unneeded gas-fired power plant. Entergy also owns other vertically integrated utilities (like Entergy Mississippi, Entergy Louisiana, and Entergy Arkansas) and independent power providers like System Energy Resources Inc (which owns the Grand Gulf Nuclear reactor in Mississippi). In 2018, ENOL spent over $100 million buying electricity from many of these companies that are affiliated with ENOL’s parent company.  

UCS conducted analysis on coal and nuclear power plants and found many of Entergy’s assets are uneconomic compared to market prices. It appears that Entergy may be using bi-lateral contracts with affiliated companies to prop up otherwise uneconomic coal and nuclear power plants.  

For example, ENOL buys electricity from Entergy Arkansas at an average price of $49/MWh in 2018, or roughly 64% higher than average Arkansas Hub market prices in 2018. Entergy Arkansas owns and operates the White Bluff and Independence coal plants, two coal-fired power plants in Arkansas that regularly operate when it is uneconomic to do so. One reason these coal plants might be doing this is that a bi-lateral contract could make them indifferent to market prices—they’re guaranteed money either way. As a result, ENOL customers in New Orleans would be subsidizing uneconomic coal plants in Arkansas.  

​For comparison, other utilities have signed contracts for solar plus storage at $45/MWh. Solar or wind (without storage) comes in even lower, with solar as low as $25/MWh and the average wind PPA last year coming in at $20/MWh.

ENOL also buys electricity from System Energy Resources Inc (another Entergy subsidiary) owner and operator of the Mississippi-based Grand Gulf nuclear power plant. UCS analysis found that the Grand Gulf plant operates at a cost around $40/MWh; if the power plant were reliant on market prices alone, it wouldn’t be economical to own and operate the reactor. ENOL buys electricity from System Energy Resources at an average price of $77 /MWh or over two times the Louisiana hub market average. Over the long run, rooftop solar in New Orleans today would likely cost about $70-$80/MWh.  

Is it possible that ENOL customers are funding a nearly 50% profit margin to Entergy and subsidizing an otherwise uneconomic nuclear plant in Mississippi while simultaneously being deprived of rooftop solar?  

Yes, it is entirely possible.  

This isn’t the first time someone has accused Entergy of turning a blind eye to cheaper resources in favor of operating more expensive plants it owns. This past April, the state of Mississippi argued in court that Entergy Mississippi defrauded customers by not buying cheaper power off the market and demanding the utility repay up to $2 billion to its customers.  

Enacting an RPS will force Entergy to wean itself off those above-market contracts and sign contracts for renewable energy, which as outlined above, are likely to come in at or below the costs of existing contracts for coal and nuclear. An RPS in NOLA is probably going to drive energy costs down.  

RPS 101
In mid-June, I’ll be heading to New Orleans to join a convening of community members and local leaders to discuss how well-designed RPS policies have helped other drive the US’s renewable energy growth—key to fighting back climate change—while offering local economic benefits, too. If you’ll be in the area, feel free to come on by and join us. The event will take place at on June 15th from 10AM-3PM Tulane Law School 6329 Freret St, New Orleans, Louisiana 70118. For more information: https://www.facebook.com/events/2133373293620782/
1 Comment

Toni McCormick link
7/23/2019 12:00:47 pm

As a NO resident, I will soon be forced to have Entergy's "ami smart meters" because I can't afford the Opt out nor monthly fee for "manual" readings.
Many residents that already have them are experiencing exorbitant bills while power usage is the same.

I'm also concerned about the fact that these "smart" readers rely on cell towers/daisy chaining to get readings from areas or residents whose reception might be poor or nonexistent. Never mind the potential hacking or rigging issues with this.
I also understand that Entergy will have the ability to "cut off" power of individual homes. One Next Door poster said her house was shut off 3 times for 20 min. each in one day. This is very stressful on environmental units and the potential surges that could ensue w this type of manipulation.
I would like to hear AAE's position on these smart meters, how and if they are in OUR (rater payers) best interests.
Thank you very much.

Reply



Leave a Reply.

    RSS Feed

    Archives

    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    October 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    August 2019
    July 2019
    June 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    October 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    May 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    December 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    January 2014
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    April 2013
    March 2013
    February 2013
    January 2013
    November 2012
    October 2012
    September 2012
    August 2012
    July 2012
    June 2012
    May 2012
    April 2012
    March 2012
    February 2012
    January 2012

    Categories

    All
    Alexandria Lia
    ALI
    ALI Meiner
    Andrew Wiseman
    Anniversary
    Bia Assevero
    CalGreen
    CCS
    Charles Rice
    Clean Energy
    CLECO
    CLECO FAQ
    CLECO Sale
    CLECO Sale Denied
    CLECO Stock
    CLECO Stock Prices
    CLECO Takeover
    Climate Change
    Clyde Holloway
    CO2
    Coastal Restoration
    Corruption
    Cost
    David Roberts
    Decoupling
    Dirty Energy
    Education
    Elections
    Energy
    Energy Efficiency
    Energy Policy
    Energy Smart
    Entergy
    Entergy New Orleans
    Environmental Risks
    EPA
    FERC
    Gas Plant
    Georgetown
    Government
    Grand Gulf
    Green Building
    Grid Failure
    GSREIA
    Gulf Of Mexico
    Health Risks
    Hurricane
    Hurricane Sandy
    Industrials
    Infrastructure
    IRP
    Land Loss
    Land-Use
    LA Public Service Commission
    LEED
    Liquid Air
    Louisiana
    Louisiana Public Service Commission
    LPSC
    MACQUAIRE
    Mayor's Office
    MISO
    Natural Gas
    New Iberia
    New Orleans City Council
    News
    NRDC
    Nuclear
    Oil & Gas Leases
    People Power
    Pipelines
    Power Grid
    Power Outages
    Power Plant
    Public Interest
    Regulation
    Reliability
    Renewable Energy
    RENEWABLE ENERGY POLICY NETWORK FOR THE 21ST CENTURY
    Resiliency
    Resolutions
    RTO
    Rulemaking
    Sacrifice Zones
    Sea Level Rise
    Solar
    Storage Solutions
    Subsidies
    SWEPCO
    TED Talks
    The Town Walk
    Town Hall Meetings
    Transmission
    Utilities
    Vicki Arroyo
    Watchdog
    Water Conservation
    Water Use
    WDSU
    Wetlands
    WWL Radio

    RSS Feed

Intern & Volunteer
If you want to be a frontline soldier on environmental protection, social justice, or environmental racism, come to Louisiana” –Gary Groesch, Founder of AAE
Calendar
View our events calendar ​for important upcoming community events and public meetings!
Support our work- ensure fair, affordable, and environmentally responsible energy for all.
501(c)3 IRS Notice

Alliance for Affordable Energy
Phone: (504) 208-9761
4505 S Claiborne Ave
New Orleans, LA 70175

Copyright © 2022 · Alliance for Affordable Energy
  • Home
  • Who
  • What
    • Consumer Protection and Education >
      • Regulate Our Pipelines
      • Health Impact Assessment
    • Clean Energy >
      • Renewable & Clean Portfolio Standard
      • Transmission
    • Energy Efficiency >
      • EEFA
    • GS4GND
    • Past Work
  • How
    • New Orleans City Council >
      • Council Actions
    • New Orleans Dockets >
      • UD-22-05 Hurricane Ida Costs
      • UD-22-04 Demand Solutions
      • UD-22-03 Battery Storage
      • UD-22-02 100% Renewable
      • UD-22-01 Storm Reserve
      • UD-21-03 Resilience
      • UD-21-02 Zeta Cost Recovery
      • UD-21-01 Winter Storm Uri
      • UD-20-02 IRP (2021)
      • UD-19-01 RPS
      • UD-18-07 ENO Rate Case
      • UD-18-02 EV Charging
      • UD-18-01 Smart Cities
      • UD-17-04 Reliability
      • UD-17-03 IRP (2018)
    • LA Public Service Commission >
      • LPSC 2022 Election
      • Engage with the LPSC
    • Lawsuits & Appeals
    • Climate Initiative Task Force
  • News
    • The Watchdog
    • People's Power Hour
    • MISO Soup
    • Hurricane Ida
    • Events Calendar >
      • AAE House Party
  • Learn
    • Glossary
    • Timeline
    • Reports
  • Get Involved
    • Support
    • Newsletter
    • Intern and Volunteer >
      • Wimpelberg Intern Fellowship
    • Contact Us