“But why not natural gas instead of Battery Energy Storage System (BESS)?” seemed to be the question of the day during the May Louisiana Public Service Commission (LPSC) meeting. 

During discussion of agenda item U-37799, a joint application for certification of a 100MW BESS agreement and approval of the third amendment to the Amite Solar Power Purchase Agreement between DEMCO and Amite Solar, Commissioner Mike Francis raised concerns about the lack of a true market test and the confidentiality of the project’s cost, asking what it would look like instead if they had worked toward building a Combined Cycle Generator Turbine instead of the BESS option to help with the load pocket issue this area of South Louisiana faces. 

“In this market, you’re looking at seven to 10 years,” said Travis Stewart, a consultant on this project for DEMCO. “There’s been no development work that has been started, you would have to go through a process of securing site control, permitting. There would have to be an additional process to ensure that there would be gas delivery. The next piece would be a five year study period to evaluate connecting the resource to the larger electric transmission grid.”

The storage project is slated for completion in 18 months, according to DEMCO representatives.

Under harsh scrutiny from LPSC Chair Eric Skrmetta, DEMCO representatives explained the characteristics of the project and how battery storage systems work. In the end, Skrmetta framed his comments as looking out for the ratepayer and keeping costs low. 

“If somebody wants to play, engage in experimentation, that’s great, I just don’t want them to do it on ratepayer money,” he said. “And so I see this value as a significant value to NextEra. I do because it makes sense to me that if somebody's going to have a turbine facility for wind turbines, or if they're going to have solar facilities that they should engage in this on their own nickel, and they should store power, and they should discharge it to their advantage. I just don't want to see that burden put on my citizens.”

Commissioner Davante Lewis also questioned the economic benefits of the project and the potential impact it would have on rate payers. DEMCO staff acknowledged the benefits of battery storage, but could not confirm that the project meets the lowest reasonable cost standard with an RFP process. LPSC staff and DEMCO agreed to provide pre-and post construction reporting to monitor the project’s performance and impact. 

At the request of the Chair, the Commission also took up an undocketed item at this meeting, a directive to staff to review and possibly modify the Commission’s general order from Oct. 12, 2007, related to franchise fees. Franchise fees are payments made by electric utility companies to local governments for the privilege of serving electricity to that community.

This General Order sought to clarify how franchise fees are recovered - whether they should be included in the base rates or through other means. And although the LPSC doesn’t regulate the actual franchise fee (those are set by local cities or parish governments), they do have jurisdiction over how those are recovered, and the Commissioners believe there’s new activity in that area, making this general order worth revisiting, Skrmetta said.

“Basically, the concept is that we would re-orient the 2007 or 2008 action to where we would establish that all franchise action by parish is our line item on the bills, whether they be electric, gas, water, but also that they are established outside of the Commission authorized rates,” he said. “The Commission works very hard to keep the rates as low as they can be, and so they should not be interpreted as a Commission rate increase. They should be line itemed as the particular parish action by their council, and that, realistically, should be listed as a tax.” 

LPSC staff said they will open a docket for comment, but that probably will not happen until August by staff estimates. Chairman Lewis went on record noting that this was a bi-partisan push among the Commissioners, and there was no opposition to the directive.

In other business: 

• Commission approved with no opposition agenda item S-37813 - Southwest Louisiana Electric Membership Corporation, ex parte. In re: Request for a Letter of Non-Opposition to borrow funds, including mortgaging assets, associated with SLEMCO's Construction Work Plan. Based on their own analysis, staff agreed that the transaction is in the public interest and filed its report to the LPSC on April 1 of this year. Staff recommended that the Commission express non-opposition to the request and the conditions contained in the staff’s report. 
• Three qualifying bids were received in regard to agenda items Ex. 5 X-37896, X-37897, and X-37898 - fuel adjustment clause filings for Cleco, SWEPCO and Entergy for January 2023 through December 2025. Bids were made from Drexel Hamilton, United Professional Company, and London Economics. Staff made no recommendation on this matter, Chair Skremetta moved to accept the bid of United Professional Company, and was seconded by Commissioner Lewis, for a budget not to exceed $183,000.
• The Commission expressed no opposition to retaining Fishman Haygood for possible intervention in the following 16 FERC dockets: 26-1920,  17-405, 17-406, 26-0056, 26-1915, 26-1935, 26-1946, 26-1962, 26-1972, 26-1980, 26-1999, 26-2000,  26-2003, 26-2015, 2658 and 26-2065.

You can watch Louisiana PSC meetings here: https://www.youtube.com/@louisianapsc.

The next Louisiana PSC meeting will take place on June 17 at 9:00am at the Galvez Building (602 North 5th Street, Baton Rouge).

Southern Renewable Energy Association and Powering Louisiana write these stories because regulatory decisions shape everyday life, from affordability to reliability, and yet they’re still often a mystery to the average consumer. Our aim is to provide transparent recaps of these meetings and show how you can participate in public comment or hearings. Keep up with all things Louisiana by following Powering Louisiana on Facebook and sign up for email updates.