Flawed Louisiana Net Metering Study Called Into Question

As most readers know, it’s difficult to find the truth in a political debate. When it comes to solar, the opposition to solar almost never tell the truth. This holds true for members of the Louisiana Public Service Commission and its plan for a cost/benefit analysis regarding net metering.

After several months of delay, the LPSC finally released a study of solar net metering, and besides tardiness and a lack of focus, it also came with significant flaws

The study was completed by Acadian Consulting of Baton Rouge, and was originally due in October. It was intended to be a costs/benefits analysis of NEM. The study, though, has been marred by controversy from its inception, with the consultant selection process defined by unusual circumstances and hidden information. As a result, subject matter experts were denied an opportunity to perform the study in favor of a company steeped entirely in fossil fuel and utility relationships, with little or no net metering background.

So it’s no surprise the Acadian study is flagged by industry experts for its inconsistencies, including missing significant data. For instance, Acadian’s analysis factors in unrelated costs of solar without assessing any of its benefits, and doesn’t refer to the fact that solar has created 1,200 direct jobs and hundreds more indirect jobs in the state.

In addition, the Acadian study omits data that says total savings and new consumer spending generated from the private solar investments and installations in just the past five years will surpass $400 million during the 30-year lifespan of the solar panels. It also ignores an investment last year of $40 million by venture capitalists into Louisiana solar firms. 

Also missing from the data is the admission by Louisiana’s largest monopoly utility, Entergy, for $2 billion in new power plant investments paid by ratepayers to meet the needs of Louisiana’s current industry expansion. Nor does it mention that Entergy is guaranteed a nearly 10 percent profit on all investments, regardless of the increased burden on customers.

It’s almost laughable to see the author’s tortured efforts to reference well-known studies from around the country with highly beneficial conclusions for solar energy, but somehow turn them into a negative for Louisiana.

The fact is, the Acadian study is a distortion of the truth, an assault on consumer energy choice and property rights by the state-sponsored monopoly utilities and certain allies on the Commission. But that’s not all.

Other problems with the study’s integrity simply outweigh any claim to legitimacy and accuracy:

  1. The release of the draft study in March during legislative budget hearings, five months overdue, is highly questionable.
  2. The study mistakenly asserts that a state tax credit is a cost to a utility (P 111, Fig. 37) when it is not.
  3. The report is outside of scope for a cost/benefit analysis of net metering, as directed by the PSC.  In fact, of the 15 cost/benefit studies done by experts over the last seven years, not one included state subsidies.
  4. The report cites a study by Crossborder in 2013 which found “zero” net metering cost but then projects out 35 years of NEM costs based on two peak years of increased customer adoption in 2012 and 2013.
  5. The report does not take into account the phase-out of tax incentives which began mid-2013.

According to industry insiders, Acadian never contacted a single solar energy company for data or input. This fact is highlighted by its conclusion that the poor are subsidizing the rich, which completely omits research on leasing-model solar firms. More than 85 percent of these firms’ customers live in census tracts below the median income.

Another omission includes the 2013 study by economist James Richardson showing the state’s return on investment of 108 percent in the solar tax credit program.

Of course, these errors are expected when you consider the backroom political dealing that has been exposed by the national press. Utility monopolies and their well-funded Commission allies are, according to a new report in the Washington Post, colluding to derail consumer interest in energy rights and solar power. Louisiana is becoming a frontline for this monopoly-driven struggle over property and energy rights.

Not only are the monopolies using ratepayer funds to fight businesses, jobs, technology and choices the ratepayers want, but they’re using the ubiquitous anti-solar political action group, Americans for Prosperity, and all the fake data and scare tactics they can find.

With most other states, such as conservative-led South Carolina and Georgia, trending toward expanding their net-metering and solar energy infrastructure, Louisiana cannot afford to move in reverse on this important new global growth industry.

Let’s just hope that truth, job creation and solar’s ability to provide ratepayers energy choice will win the day, and Louisiana’s legislators and commissioners will not put 1,200 people out of work.

Lead image: Louisianna map via Shutterstock

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Jeff is an entrepreneur and industry leader in Louisiana’s growing solar and renewable energy industries. He is co-founder and current President of the region’s renewable energy trade association GSREIA ( http://www.gsreia.org ), with a focus on policy development in Louisiana, Mississippi, and Alabama. Jeff is also President and owner of Solar Alternatives Inc (http://www.solalt.com ), a solar and energy independence firm based in New Orleans. Co-founder of Louisiana Wind LLC ( http://www.lawind.com ), which aims to bring the first utility-scale wind farm to central Louisiana by 2020. Jeff received a BSEE from Rice before an early career in enterprise software, and returned to New Orleans just in time for Hurricane Katrina to force a career shift into rebuilding and solar energy. Jeff is a licensed contractor, NABCEP Solar PV and Thermal certified, and enjoys escaping into the North Carolina mountains for relief from southern summers.

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