In January 2024, the Democratic Party-controlled Louisiana Public Service Commission adopted new Phase II Energy Efficiency Rules related to the Quick Start program. This program is funded by skimming money from ratepayers through rate increases. In other words, they’ve figured out how to raise something like a tax by a different name. That money (estimated to be about $150 million annually) will fund programs similar to those promoted and favored by the Biden Administration, Blackrock, and Vanguard.
Former Louisiana Treasurer John Schroder had already divested Louisiana from these Environmental, Social, and Governance (ESG) investment schemes. However, these nefarious forces don’t give up easily. Read on to learn what this new subterfuge means for Louisiana residents and why you should pay close attention to this matter.
Public Service Commission
The Public Service Commission is a constitutionally created body (Article 4, Section 21) that falls into the executive branch. It consists of five members directly elected by the people from single-member districts for six years. The commission is responsible for regulating all common carriers and public utilities and for adopting and enforcing reasonable rules, regulations, and procedures necessary to discharge those duties. The commission also has other powers and duties provided by law.
Presently, the Public Service Commission consists of three (3) Republicans and two (2) Democrats: Eric Skrmetta (R – District 1), Craig Greene (R- District 2), Davante Lewis (D – District 3), Mike Francis (R – District 4), and “Bananas” Foster Campbell (D – District 5). Interestingly, the commission has a minority party chairman, thanks to Republican Craig Green. In January 2023, Green joined Democrats to elect Foster Campbell as the commission’s chairman. Since then, the commission seems to have become an instrument of the hard left.
In the name of “energy efficiency”
The Public Service Commission adopted rules and initiated Phase I of the Quick Start Program in September 2013. Skrmetta and Campbell both served on the Commission at that time. Former commissioner Clyde Holloway and Commissioner Skrmetta were vocal opponents of the program at the time. Many saw the program as a movement by the left to infiltrate the energy efficiency system. The fear was they would utilize it as yet another wealth transfer welfare scheme financed by ratepayers through higher fees. Those monies are then distributed to leftist causes.
Campbell and former Commissioners Lambert Boissiere, III, and James Field supported the measure. It was also favored by renewable energy advocates, such as the Sierra Club and the Alliance for Affordable Energy. The Sierra Club openly advocates against the oil and gas industry, while the Alliance for Affordable Energy believes white supremacy and environmental racism are a threat to the environment. Casey Roberts, executive director for the Alliance for Affordable Energy out of New Orleans when adopting the Phase I rules, stated: “These new rules will help Louisianians lower their energy bills and use those savings for other critical needs like medicine and food.”
Public Entity and Quick Start
The Quick Start Program consisted of two main energy efficiency (EE) programs, one focusing on public entities and the other administered by participating energy companies. The Public Entity EE Program is available to public school districts, public higher education institutions, local governments, state agencies, and other public entities. Public entities are required to apply, and ultimately, the Commission determines whether to grant funding to the project. Meanwhile, the participating utility administering EE Quick Start Programs placed the responsibility of all participating electric and gas utilities on developing, implementing, and administering EE programs. Despite the criticism of the program set-up as “the fox guarding the henhouse,” utility companies weren’t without oversight. An audit process was included in the Quick Start Process, which provided for staff investigation and the issuance of an audit report.
In both instances, the program would be funded by ratepayers through the assessment of an EE Rate Rider. The typical residential customer (1,000 kw usage) would be assessed around $0.47 monthly, and the typical non-residential customer (12,500 kw usage) would be assessed $5.41 monthly to fund the utility-administered EE Quick Start Programs. An additional surcharge to the ratepayer would also fund the public entity EE programs.
Phase II will affect you
On January 24, 2024, by a vote of 3:2, the Public Service Commission approved the final Phase II Rules for the EE Program. Commissioner Craig Greene made the original motion, which was opposed by Commissioner Eric Skrmetta. In the end, Republican Commissioners Mike Francis and Eric Skrmetta opposed adopting the amended rules. After hours of debate, Republican Commissioner Greene joined Democrat Commissioners Campbell and Lewis for final passage.
Commissioner Skrmetta led the charge in opposing the measure. He questioned whether the rules divested the Commission of its constitutional authority and placed it in the hands of an unaccountable administrator. Commissioner Skrmetta pointed out that the fee to hire an administrator or public manager would be somewhere between $3 and $5 million dollars. He indicated this would allocate $15 million for landlords and $27 million to low-income area projects. The money would be spent without identifying the specifics of any project or even allowing the Commission to vote on it. Instead, the decision-making process would be entirely in the hands of an administrator. Commissioner Skrmetta objected to placing the authority to identify “needs” and allocate money to third parties. He also pointed out that Blackrock and Vanguard are using similar programs.
During the meeting, Commissioner Greene stated, “The point of all this is to create accountability.” Skrmetta quickly pointed out, “Accountability is what we all want, which is why you should want to know why we don’t need to hire an administrator. Because if you want to waste $5 million of the public’s money to be spent on patronage, then you need to start talking about accountability.” Commissioner Skrmetta indicated: “I want a program where it’s 100 percent the general public benefits and there’s no special interest…”
Differing Views
Approximately eighty individuals representing Together Louisiana showed up in support of the measure. Several times during the meeting, audience members could be heard yelling and chanting, which disrupted the meeting. Many of these agitators appeared to have a close relationship with Commissioner Lewis. Lewis spoke about this program as another example of developing a workforce and incentives such as those seen from the Biden-Harris administration, “investing back into our people.”
Jodie Manale, an Alliance for Affordable Energy member, criticizes a lack of publicity and proactive outreach to customers as justification for appointing a third-party independent administrator. Logan Burke, also with Alliance for Affordable Energy, stated the amended rules would allow the administrator “who has the expertise to look at the specific needs in those communities for those households that are struggling in those specific ways and to find solutions…” Burke also stated that the state can “leverage these programs right now with around $250 million coming down from the federal government.” Emma Hopkins with the Sierra Club indicated Louisiana has the “highest energy burdens in the country.” Meanwhile, Forest Wright, with the American Council for an Energy Efficient Economy, asserted that “Louisiana residential customers had the highest average consumption of energy compared to any other state in the country.”
Utility companies weigh in
Mark Kleehammer with Cleco Power stated that they have repeatedly asked to be exempted from the third-party administrator concept. Kleehammer stated, “We are spending more and more effectively delivering programs that provide savings and value to customers.” Kleehammer compared the program to four different jurisdictions that employ third-party administrators. He found that Louisiana’s cost of $0.20 per kWh is 50% less than Hawaii and Wisconsin and less than a third of the cost of Vermont.
Bobby Gilliam with SWEPCO firmly believed that the cost would increase by an estimated 113%. He mentioned that they used a third-party administrator (CleaResult) in 2015 and experienced a rate and a cost increase. The administrator charged $14 million. Gilliam stated that they ultimately decided they could do a better job themselves. Paul Pratt with SWEPCO stated, “… to tear down what utilities have already built and fine-tune it just doesn’t make financial sense. I can’t find a positive in that.”
Commission Secretary Brandon Frey also provided data supporting the fact that Louisiana has very low residential utility rates. Frey stated that the per kilowatt hour rates were as follows for the jurisdictions being compared: Louisiana (11.92 cents); Oregon (13.24 cents); Wisconsin (17.05 cents); Vermont (22.11 cents) and Hawaii (42.69 cents). Louisiana has the lowest rates in the West Central region. In that same region, customers averaged around 1,177 kWh per customer. However, Louisiana customer usage was amongst the highest, at 1,231 kWh per customer.
Commission Consultant
Philip Hayet, a Commission-hired contractor with Kennedy and Associates, also spoke. When Skrmetta asked whether the current public entities utility program was working, Hayet said it was. Skrmetta asked how they came up with the concept of having a third-party administrator or public manager. Hayet stated that the concept was developed in the interest of the Commission but that the language adopted was based on work done in Oregon, Wisconsin, and Hawaii. Skrmetta advised Hayet that the language looked as though it had been copied directly from Biden’s Department of Energy’s website. Commissioner Skrmetta said that the concept of an administrator and public manager is nearly identical to the mechanism created by the Biden Administration.
More on the players
Commissioner Davante Lewis seemed to be leading the charge for the Phase II programs. According to the Louisiana Public Service Commission website, Davante Lewis is a “social justice activist.” Lewis was elected in December of 2022, defeating the incumbent Commissioner Lambert Boissiere, III, despite only receiving 18% of the vote in the primary. Boissiere led the primary with 43% of the vote or 98,003 ballots cast, nearly 57,000 more than Lewis received. One month later, Lewis defeated Boissiere by about 17,000, with only 89,099 ballots being cast in the race.
In November 2022, Lewis accepted a $5,000 donation from the Environmental Defense Action Fund PAC out of Washington, DC. According to the Louisiana Board of Ethics Website, the group has poured hundreds of thousands of dollars into Louisiana since 2019, providing $684,430 to Restore Our Louisiana Coast Fund and $769,413 to Keep the Lights On. The organization has only provided campaign contributions to one other political candidate in Louisiana: John Bel Edwards.
According to the January 2024 Statement of Organization, Keep the Lights On is affiliated with the Environmental Defense Action Fund. In October 2023, they supported candidates Kim Coates (R 6/10), Randall Liles (R 1/10), Mike McConathy (R 1/10), Thomas Pressly (R 6/10), Chris Turner (R 4/10) and Bill Wheat (R 5/10) in their 2023 races for the Senate or House of Representatives.
Environmental Defense Action Fund
The Environmental Defense Action Fund, the advocacy partner of the Environmental Defense Fund, Inc., established the Environmental Defense Action Fund PAC to “facilitate political contributions.” During the agency fiscal year ending in 2022, the Environmental Defense Action Fund received grants exceeding $6 million from Environmental Defense Fund, Inc. The Environmental Defense Action Fund has also partnered with the Climate Policy Initiative. This non-profit organization receives long-term funding from George Soros to study the effectiveness of climate finance.
In February 2022, David Kieve became President of EDF Action. Kieve previously served as the Director of Public Engagement on the Biden White House’s Council on Environmental Quality. According to EDF Action, he “played a central role in helping the President [Biden] get elected.” Kieve also worked on the Justice40 initiative to ensure that at least 40% of federal climate investments go directly to frontline communities “most affected by poverty and pollution.” EDF Action formally announced its opposition to Donald Trump’s presidential candidacy in March of this year.
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