Yesterday, the Louisiana Public Service Commission (LPSC) voted against Entergy Louisiana’s proposed Experimental Renewable Option (ERO). The ERO is a form of a Green Tariff that allows for utility customers to purchase renewable energy, while protecting customers that do not. Multiple states utilize Green Tariffs, most commonly for commercial customers that have sustainability goals to meet. Walmart, for example, is the State’s largest employer and is committed to 50% renewable energy by 2025. Since Louisiana has a regulated energy market with fully integrated utilities, Walmart does not have a choice in where they buy electricity, so they have to work with their utility to develop a renewable energy option, often referred to as a Green Tariff. Green Tariffs can work really well and have multiple benefits including incorporating more renewable energy into the grid, attracting more commercial businesses, while keeping costs low. Some folks are willing to spend a couple dollars more a month for the right to clean energy’s attributes, some aren’t. A renewable option allows for folks to choose. And, with any supply side resource, there are risks and benefits associated like stranded costs with a gas plant or potentially lack of energy from underproducing solar panels.
So, if Green Tariffs are so good, why did the LPSC do the right thing by voting against it?
Here’s the deal. Just because Green Tariffs can have multiple benefits, does not mean that all Green Tariff policies are inherently good, and just because they are in place does not mean that they are useful. One of the most common examples may be a utility creating a Green Tariff option simply as a ‘token gesture’ to include in their offerings, that doesn't actually meet the needs of potential customers. If the offering is not being used, the benefits will likely not materialize, and we all miss an opportunity to implement an inclusive, comprehensive and useful Green Tariff.
Entergy Louisiana’s ERO seemed to be just that. It excluded residential customers, only allowing large Commercial and Industrial customers to participate, yet the State’s largest Commercial and Industrial customers, including Walmart strongly opposed this renewable energy option. Entergy was proposing something for companies like Walmart, and not only did Walmart not want to participate in it, they strongly opposed the ERO even existing. Their reason? It was a bad deal. Entergy designed the ERO so that the Commercial and Industrial customers would be paying all of the costs, yet not eligible for all of the benefits. Furthermore, Walmart believed passing this ERO would close the door on future Green Tariff development in Louisiana.
Commissioner Greene recognized passing this ‘token policy’ would serve to end the discussion on additional, more beneficial, Green Tariffs in Louisiana and voted against it, in favor of opening a new proceeding to actually develop good Green Tariff options for the State’s utility customers, and that was the right decision. By taking the time to research best practices in Green Tariff development and implement them with an inclusive and attractive policy, Louisiana will be much more likely to reap the benefits and realize much higher levels of renewable energy on our electric grid.