A Louisiana Public Service Commission majority improved the state’s competitive position by streamlining its approval process for large power users while batting away a wolf in sheep’s clothing.
Last week, the PSC approved a directive sponsored by Republican Commissioner Jean-Paul Coussan that would cut red tape for such users, as defined by it. This permits quicker approval for projects that feature a minimum 15-year electric-service agreement with a new or expanding customer, confirmation from the Department of Economic Development that the project is a priority, and a user pledge that it will supply half of the revenue to cover at least half of its project’s fixed costs, which typically involves increasing transmission capacity.
Heretofore all requests to the PSC went through a usual process that might take up to two years for vetting. This new one, if the PSC agreed it met these criteria, could take only a third of that time. The Commission majority saw a need for this to expedite these, by definition, massive projects that, by definition, would take longer to get up and running and in the face of pressure from other states bargaining for locating these within their boundaries. By and large, this new procedure applies to data centers that collectively will require multiplicative increases in power over the next decade within the U.S.
One special interest, a group of large chemicals-based industrial users, wanted some restrictions included such as guarantees of lowest pricing and highest reliability. Its request must be understood in the context that these users have expressed a desire to become their own producers of energy to sell or to collect tax credits at home and abroad from more expensive renewable energy sources to consumers that as a result could cause price hikes for all users. Earlier this year the PSC shot down their request to launch the process to do that, effectively leaving existing power companies as the only wholesale providers. The largest provider, Entergy Louisiana, to date has been the overwhelming beneficiary of all the new proposed business that will become stimulated with the new directive.
As wisely, it also rejected a directive by Democrat Commissioner Davante Lewis that would have defined the large user category and with project applications demand details about such things as cost-sharing, reliability, and consumer protections. This he touted as a means to achieve transparency as well as to judge better whether to approve of the action and inherently criticized the just-adopted directive as threatening broad price hikes without the strictures of his version. This one was favored by other special interests who tout a decrease in the use of fossil fuels and would have created a stricter process than in existence.
But as Coussan and other commissioners noted, it wasn’t necessary to have this framework to enjoy the advantages that Lewis articulated. Republican Commissioner Eric Skrmetta pointed out that these kinds of things didn’t have to be dealt with up front, but as the process unfolded. The PSC has the authority to impose at any time restrictions and requirements onto a user, including such things as procurement and sourcing that protect all other users, including the public, from paying higher rates. Simply, the approved directive created a widemouthed funnel for project discretion that the PSC can narrow down to the width of a straw as needed, while the failed directive acted like a straw, piling on rules and regulations from the start that would slow down approval and restrict flexibility.
And it masked a hidden agenda. Lewis and his ilk know that the only source of cheap and rapidly built-up generation capacity comes from fossil fuels. The approved directive creates every incentive, because of the size of demand involved and speed needed to facilitate, for an increase in fossil fuel usage. As acolytes of evidence-free catastrophic anthropogenic global warming hysteria, they want to use every means to discourage fossil fuel usage, including trying to foist a regulatory straitjacket onto those projects that would cause the largest increase in usage of that kind of energy.
Fortunately, all other commissioners didn’t accept these Luddites’ Trojan Horse, and so now Louisiana has become even better placed to exercise its competitive advantages for beneficial economic development.
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