The 2023 Regular Session of the Louisiana Legislature wrapped on June 8, 2023. During this session, the Louisiana Legislature enacted a number of bills in the energy and environmental sector of the law. Below is a brief summary of all new relevant adopted provisions:
Act 150 (SB 103) changes the name of the Department of Natural Resources to the “Department of Energy and Natural Resources.” Act 150 has an effective date of January 1, 2024. Act 455 (SB 154) establishes a new statutory framework for “renewable energy leases” and regulates leases for wind, solar, and hydroelectric energy production. The Act outlines the rights and obligations of the parties involved in said leases. Act 455 enacts new statutory provisions, R.S. 30:1161-1179, and has an effective date of June 28, 2023.
DEFINITION OF RENEWABLE ENERGY LEASE
Per Act 455, a “renewable energy lease” is a defined term described as:
A lease of immovable property that is entered for the primary purpose of the lessee’s engaging in the production of wind, solar, or hydroelectric energy using the leased immovable, and any other lease pursuant to which the lessee’s primary activity on the leased immovable is the production of wind, solar, or hydroelectric energy.
Act 455 further provides that the lessee’s rights in a renewable energy lease are susceptible of mortgage, as well as his rights in the buildings, improvements, and other constructions. The provisions of the Act explicitly state that a renewable energy lease is not a mineral lease; however, it is evident that many provisions are similar in nature to those found in the Mineral Code.
RIGHTS AND OBLIGATIONS OF PARTIES INVOLVED
Reasonable regard is required to be exercised between the owner of land burdened by a renewable energy lease and the lessee of a renewable energy lease, and the lessee of a renewable energy lease shall not unreasonably interfere with the rights of others lawfully exercising their rights in the land, subject to the laws of registry. The language of the new law also establishes an obligation for the lessee to act as a reasonably prudent operator.
TERMINATION AND REMEDIES FOR VIOLATION
Act 455 establishes that a renewable energy lease terminates at the expiration of the agreed term or upon the occurrence of an express resolutory condition, and if the lease is violated, the aggrieved party has a right to relief for violation. The law further adopts substantially similar written notice requirements and remedies to the provisions found in the Mineral Code which govern the violation of a mineral lease. As such, the lessor is required to provide written notice of the asserted breach of performance and allow a reasonable time for performance prior to a judicial demand for damages or dissolution of the lease. The lessee thereafter has 30 days after the receipt of notice to pay the rent or respond in writing stating a reasonable cause for non-payment.
Moreover, dissolution is unavailable when the lessee pays the rent or royalties due within 30 days of receiving notice unless it is found that the original failure to pay was fraudulent. The court has discretion to award additional damages in an amount not to exceed the amount of rent or royalties that were not timely or properly paid, interest on that sum from the date due, and reasonable attorney fees if the lessee pays the rent or royalties due within thirty days of receiving the required notice but the original failure to pay rent or royalties was either fraudulent or willful and without reasonable grounds. In all other cases, damages shall be limited to interest on the rent or royalties computed from the date due, and reasonable attorney fees if such interest is not paid within thirty days of the written demand. The court may dissolve the lease if the lessee fails to pay rent or royalties due and fails to inform the lessor of a reasonable cause for failure to pay, and, additionally, the court may award as damages the amount of rent or royalties due, interest on that sum from the date due, and reasonable attorney fees regardless of the cause for the original failure to pay.
The lessor of a renewable energy lease has a privilege on all equipment, machinery, and other property of the lessee on or attached to the property leased for the payment of his rent and other obligations of the lease. This right also extends to equipment, machinery, and other property of a sublessee on or attached to the property leased, but only to the extent that the sublessee is indebted to his sublessor at the time the lessor exercises his right. The lessor may also seize the property subject to his privilege before the lessee removes it from the released premises, or within 15 days after it has been removed by the lessee without consent, if: (1) it continues to be the property of the lessee and (2) it can be identified.
Act 378 (HB 571) requires revenue sharing for carbon capture sequestration projects on state lands or water bottoms as follows: 30% to parishes, 30% to the Mineral and Energy Board, and 40% to the state general fund. It also increases funding for the Carbon Dioxide Geologic Storage Trust Fund. Act 378 requires proper notice to parishes when the Mineral and Energy Board, the Department of Natural Resources, or Department of Wildlife and Fisheries receive an application for a permit related to carbon capture and sequestration. An environmental analysis must be submitted as part of the application for a Class VI injection well permit. Lastly, the enacted law also increases reporting requirements and further aligns liability provisions with current Department of Natural Resources practices and Environmental Protection Agency standards.
SR 123 requests the U.S. Environmental Protection Agency to take actions necessary to timely review and grant the state of Louisiana’s application for primacy in the administration of Class VI injection well permitting.
Coastal Protection and Restoration Authority (CPRA)
SCR 17 approves the comprehensive master plan for integrated coastal protection. Importantly, the “coastal master plan” must include a list of projects and programs required for the protection, conservation, enhancement, and restoration of the coastal area. It must also include the action required of each agency to implement said project or program and a schedule and estimated cost for the implementation of each included in the plan. In addition, the state’s “coastal master plan” must be updated every six years and outlines the strategy to combat coastal land loss and storm surge flood risk. The 2023 state master plan projects include: 65 restoration; 12 structural risk reduction; $11 billion for nonstructural risk reduction; and $19 billion for dredging. Lastly, SCR 6 approves the annual integrated coastal protection plan for Fiscal Year of 2024.
In conclusion, the legislature has enacted several additions to Louisiana’s energy and environmental laws — including adopting a new framework for “renewable energy leases.” These new laws affect the rights and obligations of owners, lessors, lessees, and operators in these developing areas of the law. Kean Miller will continue to monitor these developments. For questions or to discuss any of the foregoing, please contact Kean Miller’s Energy/Environmental Litigation Team.
 (Emphasis added).
 Although Act 455 enacts the new statutory provisions comprised of R.S. 30:1161-1179, the final statutory numbers may be redesignated by the Louisiana State Law Institute as necessary.
 Section 1161. Renewable energy lease.
 Id. (Emphasis added).
 Section 1162. Preservation of rights.
 Section 1163. Lessee’s obligation to act as a reasonably prudent operator.
 Section 1167. Termination of renewable energy lease; Section 1168. Right to relief for violation.
 Section 1170. Written notice; requirements and effect on claims for damages or dissolution of lease.
 Section 1172. Required response of lessee to notice; effect of response.
 Section 1172(A). Required response of lessee to notice; effect of response.
 Section 1172(B). Required response of lessee to notice; effect of response.
 Section 1172(C). Required response of lessee to notice; effect of response.
 Section 1176. Lessor’s privilege.
 Section 1177. Right to seize property on premises or within fifteen days of removal.
 Title 30, Section 1109(A)(4). Cessation of storage operations; limited liability release.
 HB 571.
 Title 30, Section 1104.1. Environmental analysis.
 Title 30, Section 1107.1. Reporting; record keeping.
 Senate Resolution No. 123.
 Senate Concurrent Resolution No. 17.