Louisiana’s PSC race is a must-watch for solar energy
Considering the fact that Louisiana has among the nation’s lowest electricity rates, you would imagine the incumbent would have an easy re-election. However, the race to fill the seat in District 1, which consists of most of metro New Orleans and extends to some suburbs of Baton Rouge, is generating national headlines, with The Huffington Post calling it “The Most Important Race You’ve Never Heard Of.”
The reason this race has drawn so much attention is because solar power has become a major point of contention between incumbent Commissioner Eric Skrmetta and his challenger, Forest Bradley-Wright. Both candidates are Republicans in this very conservative district, but Forest Bradley-Wright is a very recent convert to the GOP. The main policy differences between the two center on promoting solar energy and other renewables, while limiting costs to non-solar users and utilities.
In 2007, Louisiana passed a tax credit for renewable energy that was seen as one of the most generous in the nation. The tax credit amounted for 50 percent of the first $25,000 of the cost of a system installed at a home or apartment complex. This is in addition to a 30 percent federal tax credit. In 2013, the Legislature passed a law that would phase out the program by 2017, after investigative reporting by The Times-Picayune of New Orleans found the program was costing the state tens of millions in lost tax revenue. In the meantime, residential solar installations have become very popular across Louisiana, with most solar contractors having more business than they can fulfill. Solar-leasing options have also become very popular in Louisiana and have resulted in the proliferation of the technology to the middle class.
With the pending loss of the very generous state solar tax credits — and the future of the federal credit in doubt — the solar industry has been pushing to maintain Louisiana’s generous “net metering” laws, which requires utilities to purchase solar power generated by homeowners at near-retail rates. Meanwhile, the current Public Service Commission has been trying to limit them by imposing a 0.5 percent cap, which means that a utility can stop offering net metering once 0.5 percent of its customers utilize it. They see non-solar users subsidizing solar users unfairly. Most solar users have to stay hooked to the grid because the sun doesn’t shine all the time.
Commissioner Eric Skrmetta has been a supporter of the cap, but he got behind a compromise offered by his fellow commissioner, Clyde Holloway, that would’ve lifted the cap, but allowed utilities to buy solar power at wholesale rates. His opponent, Forest Bradley-Wright, said this about the Holloway compromise:
Bradley-Wright spoke against Holloway’s plan, even though the rule in place now cuts off all net-metering benefits for future solar customers in a few jurisdictions. Better that than a rule that treats all solar customers, including those already getting net-metering, as wholesale power suppliers, he said.
‘The people who install solar systems under the state of Louisiana’s tax credits, which have been a real inspiration for many people to go solar, or under the context of the net-metering rules, are installing at a size that matches their own energy use needs, so they are not power sellers,’ he said.
Imagine a law that forced Starbucks to buy from any local coffee roasters who came to them, and do so at retail prices. Starbucks would have to raise prices on other items to offset the increased cost. Allowing utilities to buy home-generated solar power at wholesale cost is a fair deal for utilities, solar customers and non-solar customers.
As it stands now, the current net-metering schemes require Louisiana’s non-solar customers to subsidize solar customers, and that’s neither fair nor “free market.” Commissioner Holloway’s compromise would’ve leveled the playing field and lifted the arbitrary cap, which was put in place because of the additional costs that Louisiana’s numerous electrical cooperatives were paying.
A win by Bradley-Wright would give pro-solar advocates a majority on the PSC, whereas a Skrmetta win maintains the status quo. The race thus marks two starkly different visions for the future of electricity and power in Louisiana.