What’s up with New Orleans Climate Action and Renewable Portfolio Standard?

Months ago the New Orleans City Council unanimously approved a resolution committing the City to 100% Net-Zero emissions by 2040, followed by actual zero emissions by 2050. Then the Council sent stakeholders back to the table to work out the details. 

Now the Council is expected to take up a final renewable resolution in January 2021. So, what does the rule on the Council’s desks look like, and does it meet those top four goals laid out by the Council earlier this year? Here is the breakdown.​

The policy objectives the Council staked as most important in their April resolution:

1) 100% Net Zero Emissions by 2040 
2) Phase out of Renewable Energy Certificates (this is part of “net” zero calculation) by 2050
3) No carbon-emitting resources in Entergy’s portfolio by 2050
4) An annual cap of 1% Entergy revenue increase associated with the policy.
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The Energy Future New Orleans Coalition took this charge seriously and participated in a series of technical conferences with the Council’s Advisors and Entergy,  we provided comments ( here and here), and updated the Council in letters along the way.

Now the Council is expected to take up a final renewable resolution in January 2021. So, what does the rule on the Council’s desks look like, and does it meet those top four goals laid out by the Council earlier this year?
    
The short answer is no. The long answer is complicated, but first, let’s break down what Net-Zero means. 

WHEN "NET-ZERO" MEANS NOTHING

You may have heard the phrase “Net-Zero” a few times this year, whether from the Council’s resolution or the Governor’s Climate Task Force goal of Net-Zero carbon emissions by 2050, announced in August.  "Net” refers to the balance of greenhouse gas emissions, using credits subtracted from that emissions number to get to “zero.” The idea is that by giving extra credit for certain investments and behaviours the total balance of overall emissions is reduced.  It is common for Renewable Energy Certificates (or RECs), for example, to count as credit in renewables in portfolio standards.

Here’s the deal though: the Council’s goals are caught up in the “net” the advisors refer to as a Renewable and Clean Portfolio Standard (or RCPS). The fact is, it is supposed to be confusing and complicated, but it sounds nice, right? 

What’s unusual, and even deceitful, is this RCPS actually gives extra credit to activities that simultaneously incentivise more electricity sales and enables continued generation with fossil fuels, which is what the draft rule now on the Council’s desk does. For example, one feature of the rule gives credit to Entergy if it invests (ratepayer money) in Carbon Capture and Sequestration, and even gives it extra credit through something called a multiplier if the utility wants to build it in Orleans Parish. The extra credit multipliers would end in 2040.

Entergy is lobbying for this draft rule, which on its face looks like it reaches the Council’s climate goals for New Orleans, but actually enables the utility to continue to burn fossil fuels well past the 2050 deadline. This is because the rule enables credits that can be used for netting for all kinds of activities, not just purchasing Renewable Energy Certificates, and bakes them into the definition of “clean” energy. Moreover, there are multiple ways credits are boosted through mechanisms that further water-down the Council’s unambiguous direction to get rid of polluting resources. 

Another feature credits Entergy to “electrify” things that are currently powered by fossil fuels in Orleans Parish, like Sewerage and Water Board, ships at the port, or cars. However, this particular kind of credit would never sunset, meaning if Entergy takes on 100% of Sewerage and Water Board’s energy needs, ENO not only sells more electricity, they also receive  credit on the “negative” side of their carbon balance sheet for all electricity sold to SWB in perpetuity, which means the utility is allowed to burn fossil fuels on the other side of the balance sheet. This piece of the draft rule guts #3 of the Council’s 4 stated goals. In fact, Beneficial Electrification receives the most credit in the draft, valuing higher sales for Entergy over renewable energy or efficiency.  

To be sure, electrification is a worthy goal, and we have encouraged such a transition away from local burning of fossil fuels in other places like the Council’s Electric Vehicle docket. But the way this incentive is built in the advisor's draft RCPS, it’s like offering a carrot as an incentive and adds a marshmallow for desert. 

Back in August, the Energy Future New Orleans Coalition alerted the Council to the problems with the direction this rule was headed, and recommended that Council should approve a clear mandate and the Council’s goals be used as directives in the utility’s current 20 year planning process called an Integrated Resource Plan, but should not approve a rule that sounds good but waters down emissions reduction commitments
So what can you do?

The Council needs to hear from you. “Net zero” is not zero in the draft rule and if they start 2021 by voting to approve the draft “RCPS,” this Council is committing New Orleans to a rule that only extends the status quo for Entergy and ignores an opportunity for a transformative policy and transparent climate action.

We want the Council to take real action that is responsive to the needs of New Orleans, instead of standing behind nets and fuzzy math that make Entergy look clean.