During the past few years, the Louisiana Legislature has adopted many “green” initiatives as part of climate and energy policies. The state has placed a strong emphasis on increasing both renewable energy generation and energy efficiency. The following is a list of some of these important initiatives:
- The Louisiana Renewable Energy Development Act allows Grid Tied Net Metering systems throughout the state, which allows electric utility customers, who wish to install a net metering facility, to reduce their monthly electricity bill by using electricity that is generated from solar, wind, hydroelectric, geothermal, or biomass resources. See La. R.S. 51:3061-51:3063 (2003).
- Tax Exemptions for Cogeneration Equipment provide tax exemptions for electric power or energy and any materials or energy sources used to fuel the generation of electric power for resale or used by an industrial manufacturing plant for self-consumption or cogeneration. See La. R.S. 47:305(D)(1)(d). (2005)
- The Louisiana Biofuel Standard requires all gasoline to contain two percent ethanol and that two percent of all diesel must be biodiesel. The standard is set to go into effect six months after the time when the state has either (i) 50 million gallons of ethanol in annual production or (ii) 10 million gallons of biodiesel. See La. R.S. 3:4674, 3:4674.1, and 3:3712 (2006).
- Wind and Solar Energy Tax Exemptions provides an individual income tax credit of up to for the installation of a wind or solar energy systems on residential property, which may be carried forward for 10 tax years. According to “Green Scene” magazine, this is one of the most progressive pieces of legislation in the country. The credit shall be equal to 50% of the first $25,000 dollars of the cost of each wind energy system or solar energy system, including installation costs. It applies to a wind or solar system that is purchased and installed on or after January 1, 2008. The credit may be used in addition to any federal tax credits earned for the same system. See LAC La. R.S. 47:6030. (2007). In addition, equipment used for solar power is exempt from property taxation. See La. R.S. 47:1706.
- The Louisiana Geologic Sequestration of Carbon Dioxide Act establishes a comprehensive regulatory program for the control of injection, storage, and use of carbon dioxide under the auspices of the Office of Conservation within the Department of Natural Resources (DNR). The act further establishes liability limits for operators with transfer of liability for storage operations to the Geologic Storage Trust Fund (run by the state) after a specified time. Finally, the act provides authority for expropriation of pipeline servitudes, storage facilities and other associated facilities necessary for carbon sequestration operations upon a determination of public convenience and necessity. See La. R.S. 30:1101-30:1111 and La. R.S. 19:2 (2009).
- Advanced Biofuel Industry Development Initiative, has been described as one of the most comprehensive and far-reaching biofuels development programs in the nation. Called the “field to pump” strategy, it creates pilot programs and incentives. It creates two pilot programs – one for Advanced Biofuel Variable Blending Pumps which will involve blending of fuels with advanced biofuel percentages between 10 and 85 % until January 1, 2012. During the pilot, the Louisiana Department of Agriculture and Forestry (LDAF) will monitor the equipment used to dispense the ethanol blends to ascertain that the equipment is suitable and capable of producing accurate measurement. The second pilot calls for trial use of hydrous ethanol blends of E10, E20, E30 and E85 in motor vehicles specifically selected for test purposes until January 1, 2012. During this period the LDAF will monitor the performance of the motor vehicles. An income tax credit of ten cents per gallon of advanced biofuel is available to qualified small advanced biofuel manufacturing facilities. The credit applies only to the first ten million gallons of advanced biofuel produced in a tax year and expires on December 31, 2012. The act requires state agencies to purchase/lease only vehicles capable of using alternative fuels. Finally it provides a pricing discount for members of any governmental body, state educational institution, or instrumentality of the state on the price of E20, E30 or E85 advanced biofuel at a price equal to 15% less per gallon than the price of unleaded gasoline for use in any motor vehicle.
- Alternative Fuel Vehicle Incentives provide an incentive to persons or corporations to invest in qualified clean-burning motor vehicle fuel property by allowing credits against income tax liability, which equal fifty percent of the cost of the qualified clean-burning motor vehicle fuel property. See La. R.S. 47:6035 (2009).
- The Green Jobs Tax Credit provides a corporate or income tax credit for qualified capital infrastructure projects in Louisiana that are directly related to industries including but not limited to the energy efficient and advanced drive train vehicle industry and the biofuels industry. The tax credit is worth up to $1 million per state-certified green project, calculated on the base investment costs of the project, for up to a total of $5 million per year. See La. R.S. 47:6037 (2009).
- Sustainable Energy Financing Districts, authorizes “creation of sustainable energy financing districts by local governmental subdivisions and provides for issuance of bonds and property assessment programs for solar and energy efficiency projects.” This will allow local governments and subdivisions to incur debt for the purposes of providing these “energy financing districts” with necessary funds to cover the cost of energy efficiency improvements or renewable energy improvements. These loans are made directly by the district to the home or property owner, and can be paid back over a twenty year period. Property owners can even make arrangements to pay back loans through its payment of annual property taxes. See La. R.S. 33:130.790 – 793 (2009).
In addition to these legislative efforts, Governor Bobby Jindal issued a green Executive Order in 2008 which, among other things, required the Division of Administration to set energy efficiency goals for state facilities, office buildings; required each department of the executive branch to adopt a program to reduce solid waste and adopt recycling programs; directed the Division of Administration to review its purchasing practices to ensure 100% compliance with existing state requirements related to energy conservation, to adopt best energy purchasing practices and to develop or increase standards for such products as appliances, light bulbs, smart chargers, and computers using Energy Star as a minimum standard. See Executive Order BJ-2008-8.
In 2007, the Louisiana Public Service Commission developed a “Geaux Green” program whereby customers of regulated utilities can choose to purchase green power in blocks from their local utilities. Such power is generated from renewable fuels (Louisiana agricultural by-products such as rice hulls and bagasse) and is priced somewhat higher than power from traditional fuels. The cost is $2.25 per month per 100 kilowatt-hours (kWh) of electricity. A typical household uses from 1000 to 1500 kWh per month. A customer can choose to purchase only 100 kWh or any multiple of 100. Thus far, Entergy has been the only utility to offer the program; however, SWEPCO and CLECO are working with potential renewable fuels suppliers and may join.
The Louisiana Department of Natural Resources (LDNR) manages two long-standing programs that have been successful at promoting real energy efficiency measures. The first of these, the Home Energy Rebate Option or “HERO” is a LDNR program that provides cash rebate payments to Louisiana residents who have made energy efficiency improvements of 30% or more – currently applicable only to existing homes. Since its inception in 1999, the HERO program has awarded more than 17,000 grants valued at over $24 million. LDNR estimates a savings of 1529 kilo tons of CO2, over 2,000 tons of NOx reduction and over 3,000 tons of SO2 reduction. The latter program, the Home Energy Loan Program (HELP) provides home owners the ability to obtain 5-year loans to improve the energy efficiency of their existing homes. LDNR subsidizes one half of the financing for the energy efficient improvements, up to $6,000, at a low interest rate to participating lenders.