(The Center Square) – Louisiana’s electric grid is struggling with mounting reliability issues and rising consumer costs as the state grapples with extreme weather and escalating electricity consumption, according to an report from the Louisiana Legislative Auditor’s office.
Since 2014, Louisiana has endured 47 weather-related disasters costing over $400 billion in damages. Repairs from storms like Hurricane Ida have led the Louisiana Public Service Commission to approve billions in rate hikes.
In January 2023, Entergy Louisiana secured approval to charge customers $1.5 billion over 15 years, on top of a $3.2 billion fee approved the year prior.
The state ranks third nationally in electricity consumption per capita and leads in residential usage. Natural gas fuels seven of Louisiana’s 10 largest power plants, with its use increasing by 132% between 2010 and 2023.
Grid reliability has deteriorated, according to the report. According to the commission, outages increased 14.3% between 2013 and 2023, with the average outage duration surging by 50%.
Energy affordability remains a pressing issue in a state where 18.9% of residents live in poverty. Residential electricity prices rose 28.6% between 2010 and 2023, and 28.5% of adults reported being unable to pay an energy bill in full in 2023. Late payment penalties and high disconnection rates exacerbate the burden for low-income households.
In response, the commission has implemented measures to improve efficiency and reduce bills. These include mandatory energy efficiency programs set to launch in 2026, demand response initiatives, and new rules requiring utilities to report operational data.
A portion of program funding is earmarked for low-income residents and rental properties, but challenges persist as Louisiana seeks to balance affordability, reliability, and resilience in its energy sector.
Last week, the commission discussed nuclear energy’s role in Louisiana’s economic and environmental goals. The Louisiana Advanced Nuclear Competitive Edge report prepared by the Idaho National Labs, identified nuclear having massive potential for achieving net-zero emissions while supporting energy-intensive industries, proposing its integration with natural gas to meet industrial demand.
While nuclear energy’s high upfront costs remain a challenge, small modular reactors could offer a cost-effective solution.
Years-long delays and cost overruns cost taxpayers and ratepayers big time. Advanced nuclear energy may be more marketable and friendly to the public’s wallet.
The recently passed Accelerating Deployment of Versatile, Advanced Nuclear for Clean Energy Act intends to streamline the costly and lengthy permitting process, reduces regulatory costs, and incentivizes advanced nuclear technologies like small modular reactors, which are particularly suited for deployment in remote or smaller areas.
“You’re spending half a billion dollars on paperwork,” Jay Jiang Yu, founder of NANO Nuclear, told The Center Square. “If the ADVANCE Act can actually come in and reduce the cost and the timeline, you’re saving potentially hundreds of millions of dollars that could be used toward physical work.”
The commission has prioritized diversifying Louisiana’s energy sources to reduce reliance on natural gas and bolster grid resilience during extreme weather events.
Recent years have seen a sharp increase in utility-scale solar generation, which was seven times greater in 2023 than in 2020, according to the U.S. Energy Information Administration. Solar power from both utility-scale and small-scale systems accounted for 17% of the state’s renewable generation in 2023.
In May 2024, the Public Service Commission approved Entergy Louisiana’s proposal to add 3 gigawatts of solar power to its generation portfolio, marking the largest renewable power expansion in state history.
Offshore wind also presents opportunities, with the U.S. Bureau of Ocean Management awarding a development lease in August 2023 for a Gulf of Mexico wind auction near Lake Charles, potentially adding 1.2 gigawatts of capacity.
On his first day in office, President Donald Trump issued an executive order halting any offshore wind leasing and ordering a review of existing leases, putting the Lake Charles site on hold.