The Louisiana legislature approved a bill to significantly reduce state tax credits available for homeowners and solar leasing companies that install solar energy systems and put restrictions on the financing of solar systems in the state. The bill, HB 779, sponsored by American Legislative Exchange Council (ALEC) member Erich Ponti, was approved by the House and Senate in June 2015, and quickly signed by Governor Bobby Jindal.
HB 779 amends the state’s solar energy tax credit law, reducing the cap on the cost of the system from a 50% credit on the first $25,000 system cost, to a 50% credit on the first $20,000 system cost. The bill limits the amount spent by the state for both purchased and leased systems to only $10 million in FY2015–2016 and FY 2016–2017, and only $5 million after July 1, 2017.
Fossil fuel-connected front groups were heavily involved in attacking Louisiana solar tax credits in 2015.
The state legislature’s action comes on the heals of a flawed economic report on the impact of distributed solar on ratepayers in Louisiana written by Acadian Consulting Group. Led by David Dismukes, a utility and fossil fuel consultant, Acadian wrote and published a study for the Louisiana Public Service Commission (LPSC) that was commissioned to study the costs of net metering, but instead focused on the cost of solar tax credits. The firm has been criticized for its ties to the fossil fuel and utility industries, which may have impacted the rigor and outcome of their severely flawed report.
In the past, Dismukes has “publicly criticized renewable energy subsidies, while praising those for fossil fuels.” According to reporting from The Times-Picayune, Acadian has received direct funding from industry groups on several research projects, including $20,000 from America’s Natural Gas Alliance for a report that was critical of federal wind energy subsidies. Acadian’s other clients in the utility and fossil fuel industries include:
• Cajun Electric Cooperative
• CLECO Corporation
• Consolidated Edison
• Duke Energy Gas Transmission
• Duquesne Light Company
• NRG Energy
• AGL Resources
• ANR Pipeline Company
• Colorado Interstate Gas Transmission
• Columbia Gas Transmission (NiSource)
• Columbia Gulf Transmission
• El Paso Corporation
• Evangeline Gas Company, Inc.
• Florida Gas Transmission Company
• Mississippi River Transmission (subsidiary of Centerpoint)
• Reliant Energy Gas Transmission
• Sempra Energy
• Texas Gas Transmission Corporation
• Transcontinental Gas Pipeline Corporation
• Trunkline Gas Company (Energy Transfer Partners)
• Lake Charles Cogeneration LLC.
• U.S. Oil and Gas Association (Alabama and Mississippi Chapter)
The 2015 study for the LPSC written by Acadian Consulting Group, which was commissioned to study the cost of distributed solar panels to other ratepayers, instead focused on the state’s 50 percent tax credit for installing new solar panels and said that those credits cost the state at least $89 million.
Barry Goldwater Jr. said, “This study is a blatant attempt to undermine the rights of Louisiana residents and to prevent the growth of the solar industry.” Goldwater, Jr. is a former congressman, the son of the 1964 GOP presidential nominee, and the co-chairman of the solar advocacy group, Tell Utilities Solar Won’t Be Killed.
Politifact studied the claims made by Americans for Prosperity, which cited the Dismukes study, that electricity prices were skyrocketing because of solar subsidies and net metering. Politifact determined that increases in ratepayers bills did occur but as a result of the solar policies:
“Louisiana customers outside of New Orleans did see a base rate hike in 2014, which cost the average ratepayer about 47 cents per month. But that increase was approved by the PSC in 2013 and was over several issues, including the cost of maintaining an aging power grid. Electric utility company Entergy did not specifically mention solar as being an issue when announcing the base rate change… So while Louisiana did see a rate increase, we don’t see evidence that it was specifically related to a solar initiative.”
Furthermore, Sierra Club exposed severe flaws in Dismukes’ report, stating that the LPSC study included legislative tax incentives as a cost of the LPSC net metering program. Sierra Club concluded:
“No other net-metering cost-benefit analysis in the country has included state- authorized tax incentives as a cost. Public utility commissions have no authority over tax incentives and legislative policy choices, and such incentives are a cost to the state treasury not utilities or ratepayers. When these tax incentives are excluded from the utility’s cost calculation, as they should be, the study demonstrates actually that net metering provides a clear economic benefit to utilities and ratepayers.”
In addition to faulty economic research, another issue with the Acadian report was how the report was released. A draft of the report was sent out by email to legislators by Eric Skrmetta, a commissioner who was narrowly won reelection last fall against solar advocate Forest Bradley-Wright, weeks after the report was supposed to be completed for the Public Service Commission.
The Partnership for Affordable Clean Energy (PACE) also spearheaded efforts to attack solar in Louisiana. In March 2015, Lance Brown, PACE’s executive director, wrote an op-ed in The Hill repeating the utility industry’s claim that solar hurts low income customers and citing a flawed Louisiana study on the cost of net metering by a fossil fuel industry consultant, David Dismukes of Acadian Consulting Group.
Lance Brown also cited Ashley Brown, a utility-backed pundit at the Harvard Electricity Policy Group, who wrote a paper in Electricity Journal that contained little quantitative analysis behind the claims. Lance Brown also cited Louisiana solar tax credits as a reason why solar is not cost competitive, but did not mention anything about outsized tax credits given to the oil, gas, and utilities in the state.
Brown is also a member of the board of directors of the Entergy Power Group, which is a wholesale natural gas power plant company and is part of the Entergy Corporation. He was previously member of the advisory council to board of directors of Electric Power Research Institute, a think tank funded by the electric utility industry. Previously, he served as a Board Member of the Oglethorpe Power Corporation (OPC) in Tucker, Georgia. OPC is tied up with the expensive Vogtle nuclear power plant, which is being constructed by Southern Company, according to SEC disclosure filings.
The Heartland Institute also was involved and pushed Governor Bobby Jindal and the Louisiana state legislature to eliminate state tax credits for solar. Heartland again used misinformation to attack the pro-solar policy, claiming that solar tax credits were responsible for “running up large deficits” and state credits were adding to a “mountain of federal government favoritism.” While solar industry tax credits totaled approximately $57 million in 2015, eliminating these credits would have little impact on the state’s projected $1.6 billion budget deficit. The bill passed by the state legislature would save approximately $19 million.
The Citizens’ Alliance for Responsible Energy (CARE) executive director, Marita Noon, had an op-ed published in The Advocate, misleading readers by claiming, “no other industry receives $63.5 million of Louisiana taxpayer’s dollars in one year.” Noon claims that because the fossil fuel industry pays some taxes, it “gives” while the solar industry “takes.”
In March, the NBCC also came out against net metering in Louisiana and praised the flawed opinion piece from the Harvard Electricity Policy Group. The NBCC has received money from the Edison Electric Institute. Alford has recently testified in Congress to push back on the EPA’s updating of ground-level ozone rules.
Dr. Michael Dorsey, the Interim Director for the Energy and Environment Program at the Joint Center for Political and Economic Studies, told ThinkProgress that Alford is, “just mouthing off talking points from Edison Electric. It’s disturbing that he would subject himself to being so manipulated.”
