Louisiana is at a tipping point. With electricity bills soaring and demand for power generation and transmission expected to reach unprecedented levels in the coming years, our largest monopoly utility is seeking approval to spend billions on new infrastructure projects to replace aging fleets and meet escalating electricity needs. The Louisiana Public Service Commission (LPSC) now faces a defining choice: continue supporting a monopolistic system that allows big monopolies to finance projects on the backs of ratepayers or embrace Customer-Centered Options that enable private investment in power generation and allow investors – not consumers – to pay for much-needed energy infrastructure.
Let’s consider how we got here. Under Louisiana’s current system, vertically integrated monopoly utilities control both power generation and distribution. These investor-owned, regulated utilities operate with guaranteed returns on capital investments, passing costs directly onto their captive customers. Understandably, the shareholders of these monopolies want to preserve the status quo at the LPSC and view potential changes – even the prospect of a mere study – as a threat.
Meanwhile, a recent analysis by the energy advisory firm BAI Group found that if the LPSC approves all the capital projects currently under consideration, customers of Louisiana’s largest monopoly utility could see a staggering 90% increase in base rates between 2018 and 2030.
The data points to one conclusion: the current model needs to be evaluated to determine how best to meet Louisiana’s future energy needs.
Customer-Centered Options offer a smarter, more sustainable alternative. These proposals could modernize the state’s energy framework, expand consumer choice, and reduce the financial burden placed on ratepayers. By evaluating proposals to allow large energy users to procure or generate their own electricity – when doing so benefits the entire grid – the LPSC may discover new solutions that improve reliability and contain costs. This shift could not only speed up the deployment of new energy technologies, but also alleviate pressure on regulators and public utilities. It would empower consumers by aligning energy development with real market needs rather than arbitrary regulatory constraints.
The benefits are clear: faster innovation, greater grid resilience, expanded energy diversity and, ultimately, lower long-term costs for households and businesses alike.
To their credit, LPSC leaders have already taken steps by opening a docket, inviting public input, and beginning to analyze the data. Now is not the time to back away. Louisiana must continue exploring Customer-Centered Options and resist calls from the large monopolies to prematurely shut down this docket.
By continuing to evaluate and advance Customer-Centered Options, the Commission can create the conditions for private investment in energy infrastructure that doesn’t burden Louisiana families. It’s a move that aligns with basic free-market principles: risk and reward should go together, and consumers should have more – not fewer – choices in how they meet their energy needs.
Daniel J. Erspamer is the CEO of the Pelican Institute for Public Policy
This article was originally published at www.thecentersquare.com
