(The Center Square) – The Louisiana Public Service Commission has spent over a decade modifying, replacing and modifying again the state’s energy efficiency program.
The twists and turns may finally be over, with the commission approving a program that has the support of utilities, advocacy groups and the commissioners alike.
In a 4–1 vote Aug. 20, commissioners signed off on a new program that includes a four-year budget with more money able to be allocated to energy efficiency programs. Commissioner Lewis was the lone vote in opposition.
“I think everything is going to be great. Budgets have increased,” Jim Clarke, an energy efficiency contractor, told The Center Square. “It’s going to be more sustainable. It’s going to be better for contractors. Customers will get more service out of it. Companies can grow. People can count on the service.”
The energy efficiency saga began 16 years ago in 2009, when the docket was first opened. Since then, numerous iterations, rule changes, and stops and starts have left utilities, contractors and customers uncertain about what to expect.
“The biggest challenge for the energy efficiency program to date has been the starts and the stops and the changes based upon various stakeholders points of view,” said Mark Kleehammer, Cleco’s regulatory affairs lead. “We are pleased to see that there is a path forward with some certainty and some structure on a new program.”
The program is designed to give utilities larger, steadier budgets to support efficiency programs and customer incentives. For years, utilities operated under rules that set their budgets based on 2012 revenues, often leading to smaller and inconsistent funding.
Under the new framework, budgets will instead be tied to 2023 revenues, starting at 1% in 2026 and rising each year until reaching 1.5% by the fourth year.
“They’re trying to make it more robust so that it serves more people,” Clarke said. “The way the budgets worked in the past, you’ve had contractors that had to start and stop every year not knowing that they were going to have a program the next year. Now they’re trying to give the contractors the ability to grow their businesses, reach more customers and provide more service.”
A key feature of the program is the requirement that more of each utility’s budget flow directly to customers. At least 70% of funds must be spent on customer incentives at the start of the program, growing to 75% by the end of the first four-year cycle.
The long-term goal is to push that share to 80% in future cycles. At the same time, the rules require that at least 15% of every utility’s budget go toward programs that benefit low-income or high-energy-burden households.
The commission also approved new oversight measures. Instead of allowing each utility to hire its own evaluator, commissioners directed staff to bring in a single statewide contractor to measure and verify savings across all programs and “to ensure all portfolios and programs are “graded” from the same standards,” according to filings with the commission. Spending on that work is capped at 5% of each utility’s efficiency budget.
“It’s really important that we know how much money we’re actually saving, as opposed to just estimating our savings,” said Alaina DiLaura, from the Alliance for Affordable Energy.
DiLaura also said that the Alliance supported the new rules and that the program was important, “especially at a time when the cost of electricity is rising double the rate of inflation.”
