BEFORE THE
COUNCIL OF THE CITY OF NEW ORLEANS

Establishing a Docket and Opening a 
Rulemaking Proceeding to Establish a Docket No. UD-19-01
Renewable Portfolio Standard 

REPORT ON RENEWABLE PORTFOLIO STANDARDS

Pursuant to Resolution No. (?Resolution?), the Utility Advisors to the Council
of the City of New Orleans (?Advisors?) submit this Report. The Resolution opened a rulemaking
seeking public comment on establishing a Renewable Portfolio Standard for the City of
New Orleans In this Report, the Advisors discuss the comments made by the parties, and
set forth for public comment three possible alternative RPS structures. While the Council of the
City of New Orleans (?Council?) initiated this rulemaking proceeding with the intention of
adopting a simple RPS, parties to the case have brought forward at least two alternative models
that are worthy of further exploration and discussion before the Council renders a decision, and it
is the Advisors? recommendation that the Council carefully consider the different purposes and
goals that an RPS or similar standard can accomplish and which model is most closely aligned
with the Council?s public policy goals for the City. To that end, this report explains the different
models set forth, changes the Advisors would recommend to each of the parties? proposals, and
the Advisors? expectations of the success of each model in attaining the goals set forth.

Given the unique vulnerability of New Orleans to the devastating consequences of climate
change and the urgent need for decarbonization to prevent dangerous levels of global warming,
the Council has long pursued the goal of getting cleaner, reliable, reasonably priced power for New

Orleans. This RPS rulemaking builds on over a decade of prior initiatives by the Council, which

include the adoption of Net Energy Metering Rules for rooftop solar in 2007,1 the
establishment of the Energy Smart energy ef?ciency and conservation program in 2009,2 the
issuance of guidance on the creation of a decoupling rate structure in 2016,3 the revision of the
Council?s Integrated Resource Plan rules in 2017 to expressly require the consideration of
renewable resources, demand-side resources and distribution resources in the the approval
of full implementation of Advanced Metering Infrastructure across the END service
territory in 2018,5 the approval of project to build 5 MW of distributed-generation scale
solar within New Orleans in 2018, 6 the modi?cation of the Council?s Customer Service
Regulations to allow the release of aggregated whole building energy use data to building owners
for benchmarking and energy ef?ciency purposes in 2018] and both the adoption of Community
Solar Rules8 and the approval of 90 MW portfolio of renewable resources earlier this year.
As a result of the Council?s regulation of and careful attention to resource portfolio, 
current carbon dioxide emissions rates are well below national average.9 Indeed, the Climate
Action for a Resilient New Orleans issued by New Orleans Mayor Mitchell J. Landrieu in July
2017 noted that the per capita pollution rate for Orleans Parish is relatively low compared to other
US. cities ?largely due to the high amount of low-carbon energy already in our electricity mix

compared to other cities.?10

 

1 See Resolution No. R-07-132.

2 See, Resolution No. 

3 See, Resolution No. 

4 See, Resolution Nos. R-17-332 and 

5 See, Resolution No. R-18-37.

6 See, Resolution No. R-18-222.

7 See, Resolution No. 

3 See, Resolution No. 11.

9 EN0 Comments at 4.

?0 City of New Orleans, Climate Action for a Resilient New Orleans, July 2019 (?Climate Action Plan?) at 18.

2

113 l04813\V-6

In Resolution No. R-l9-109, the Council initiated this rulemaking proceeding and opened
the instant docket to consider four essential questions - What should an RPS target for New Orleans
be? What resources should count toward satisfying an How should an RPS be enforced?
How should the Council protect ratepayers from unreasonable rate increases caused by compliance
with the The Council sought input from interested parties on these questions and any other
issues relevant to the development of an RPS, and several parties responded. Comments were
?led by Entergy New Orleans, LLC the Alliance for Affordable Energy Air
Products and Chemicals, Inc. (?Air Products?), the Center for Climate and Energy Solutions
Audubon Louisiana (?Audubon?), Sierra Club, the Southern Renewable Energy
Association the Gulf States Renewable Energy Industry Association 350
New Orleans (?350 PosiGen Solar, and the Energy Future New Orleans Coalition
which is a coalition of 350 NOLA, AAE, Audubon, the Deep South Center for
Environmental Justice, PosiGen, Sierra Club, SREA and Vote Solar. Air Products opposes the
adoption of a mandatory and ENO supports the adoption of a Clean Energy Standard
voluntary goal rather than a mandatory RPS.12 All other parties generally support some
form of mandatory RPS, with the EFNO coalition proposing a Resilient and Renewable Portfolio

Standard 

 

Air Products and Chemicals Inc. Response to Request for Comment, at 1, ?led June 3, 2019, Docket No. UD-19-
01 (?Air Products Comments?); see also, Air Products and Chemicals, Inc. Reply Comments at 1, ?led July 15 
2019, Docket NO. 9?01 (?Air Products Reply Comments?).

'2 Entergy New Orleans, Comments in Response to Council Resolution R?l9-109 Concerning the
Establishment of Renewable Portfolio Standards at 2, ?led June 3, 2019, Docket No. 
Comments?); see also Entergy New Orleans, Reply Comments in Response to Council Resolution 
Concerning the Establishment of Renewable Portfolio Standards, at 2, ?led July 15, 2019, Docket No. 
Reply Comments?).

13 Joint Reply of 350 New Orleans, Alliance for Affordable Energy, National Audubon Society, Deep South Center
for Environmental Justice, PosiGen Solar, Sierra Club, Southern Renewable Energy Association, and Vote Solar
(Collectively the ?Energy Future New Orleans? Coalition of Proposing a Draft Resilient and Renewable
Portfolio Standard for the City of New Orleans, at 1, ?led July 15 2019, Docket No. UD-19-01 Reply
Comments?).

I 

Best Practices and Recent Developments in the RPS Landscape

The National Renewable Resource Energy Laboratory?s recent publication,
International Best Practices for Implementing and Designing Renewable Portfolio Standard (RPS)
Policies, recommends that policymakers should use analysis to inform RPS design, gather
stakeholder input in developing targets and RPS design, identify eligible renewable resource types
and ages, clearly de?ne the RPS, ensure compliance via enforcement, and provide a cost-
containment mechanism. 14 These best practices are generally consistent with best practices
considered in other reports,15 and the Council?s resolution initiating this rulemaking proceeding.16

A majority of U.S. states (37 in total) have now adopted a renewable portfolio standard or
goal,? and while a few have experienced challenges, most have been generally successful in
achieving the goals they have set with only a modest impact on electricity rates. 18 As of June 2019,
29 states and Washington, DO have a renewable portfolio standard with three having a Clean
Energy Standard.19 In addition, eight states have renewable portfolio goals and two have clean
energy goals20 For some time, revisions to RPS goals were simply adjustments to the goals,
I usually increasing them as the target was approached. But RPS strategies are changing and Clean
Energy Standards are a rising new trend. California added a Clean Energy Standard to its existing

RPS in September of 2018,21 and during the pendency of this rulemaking proceeding, four other

 

?4 JENNY HEETER, BETHANY SPEER, AND MARK B. GLICK. International Best Practices for Renewable Portfolio
Standard (RPS) Policies. 2019. Golden, CO: NATIONAL RENEWABLE ENERGY LABORATORY. 
72798. 

15 See, e.g. Recommended Principles And Best Practices For State Renewable Portfolio Standards, prepared and
endorsed by the State/Federal RPS Collaborative, 2009, with support from the Energy Foundation and the US
Department of Energy through the National Renewable Energy Laboratory available at:


?6 Resolution No. R?l9-109.

?7 

?8 3.1de at p. 11.

?9 

2? [?1de

21 California SB 100.

ll3lO48l3\V-6

states have followed suit -- New Mexico adopted a Clean Energy Standard in March 2019,22
Washington State adopted one in April 201923 and Nevada and Colorado adopted Clean Energy
Goals in April and June 2019,24 respectively.

This new trend is being driven by rising concern that a renewable portfolio standard alone
is simply not enough to drive rapid decarbonization. As the impacts of renewable portfolio
standards are becoming more evident and more studies are performed on the pace of climate
change, leaders in the field are beginning to advance the position that renewable portfolio standards
alone will simply not reduce carbon emissions quickly enough to avert the worst impacts of climate
change. The Council has committed to upholding the commitments made in the Paris Agreement
to limit temperature increases to by midcentury, but recent reports indicate that the post-Paris
policies of the world?s largest carbon emitters - the U.S., China and the European Union, are not
aligned with this goal, and that in fact, after declines in the previous three years, the U.S.
greenhouse gas (GHG) emissions rose in 2018 at a historically high rate.25 Thought leaders such
as former Secretary of Energy, Dr. Ernest Moniz are now promoting a broader approach than an
RPS alone. His non-pro?t organization, the Energy Futures Initiative, recently published The
Green Real Deal, A Framework for Achieving a Deeply Decarbonized Economy.26 In that report,
they ?nd that optionality and ?exibility are needed for technologies, policies and investments and

that there are no clear ?silver bullet? solutions to decarbonization at the present time.27 They write:

 

22 New Mexico SB 489 44-22.

23 Washington 16.

24 Nevada Senate Bill 358 and Colorado SB 19-236.

25 Energy Futures Initiative, The Green Real Deal, A Framework for Achieving a Deeply Decarbonized Economy,
August 2019, at 3, available at:

littp52l/static .squaresnaceeomfstaticlSSec 
EFl-rGreen+Rea1+DeaLndf (the ?Green Real Deal).

25 Available at:




27 Green Real Deal at 11.



Policymakers, state, cities, and communities need to be able to choose from a range
of pathways for deep decarbonization by midcentury. They must also avoid
prescriptive policies that could lock in suboptimal technologies and lock out
opportunities. Economywide low-carbon goals are simply too challenging to
permit a narrowing of options.28

The Energy Futures Initiative undertook a study to de?ne the existing California clean
energy landscape and recommend steps for accelerating the move to meet the state?s carbon
reduction goals by midcentury.29 The study concluded that California can reach its 2030 and
midcentury targets, but doing so will require success across all economic sectors, with multiple
technologies contributing in each and a strong commitment to technology, optionality, ?exibility,
and innovation.30 The Energy Futures Initiative conducted a comprehensive sectoral analysis for
the 2030 targets that identi?ed a portfolio of 33 clean energy technology pathways, covering all
economic sectors and found that:

Certain pathways, such as carbon capture, utilization, and storage (CCUS) offer

tremendous emissions reduction potential in dif?cult to decarbonize applications

electricity load following and industry processes) but are not suf?ciently

supported in California to be deployed at scale. With this type of uncertainty, all

pathways that offer measurable GHG emission reductions will be needed to ensure

California reaches its near-term decarbonization goals.31

Their ?ndings as to the potential for emissions reductions are demonstrated by the

following ?gure.32

 

23 Green Real Deal at 11.

29 Energy Futures Initiative, Optionality, Flexibility Innovation, Pathways for Deep Decarbonization in California,
May 2019.

30 Green Real Deal at 12, Text Box 1.

3? Green Real Deal at 12, Text Box 1.

32 Green Real Deal at iv; see also Energy Futures Initiative, Optionality, Flexibility Innovation, Pathways for
Deep Decarbonization in California, Summary for Policymakers May 2019 at xvi, available at:

icl 
Lil-'1 (SA Decarbonization AFV means alternative fuel vehicles, CAFE means corporate average fuel
economy, CHP means combined heat and power, HDV means heavy-duty vehicle, LCF low carbon fuel standard,
LDV means light duty vehicle, NGCC means natural gas combined cycle, and RNG means renewable natural gas.

6

113 

Flgure 3-3
Reductlon Potentlal for Meeting the 2030 Targets by Pathways


25



1517gees? egg 9 g; 
gti?s?a?z?ii
3 5N ?5 t? 3% itgei . git

gig 3 5 

33? 5 ii 

it?

Transportation glndunry Buildings M?wnum

The estimated emissions reduction potential for each pathway is shown by sector. They are based on an attempt to meet California?s target
to reduce emissions economywids by 40 percent. This approach attempts to meet the target wt tn an squat share from each scans-mic
sector. Source; EFI, 2019

This ?gure indicates that while the estimated emissions reductions potential for renewables
paired with battery storage is signi?cant, the potential for carbon capture, utilization and storage
on natural gas combined cycle generation plants is more than twice that of renewables paired with
10-hour battery storage and more than ?ve times that of renewables paired with 5-hour battery
storage. It also indicates that electri?cation of vehicle ?eets and energy ef?ciency both exceed
the potential carbon emissions reductions potential of renewable energy. The Green Real Deal
report also discusses the California study?s conclusions:

Meeting California?s long-term decarbonization targets, including an 80 percent
GHG reduction (or more) by 2050 and carbon-free electricity by 2045-?is
impossible without breakthrough innovations. Also, managing and operating a
deeply decarbonized energy system over a long duration has never been done and
is technically very dif?cult.

A detailed review of the state?s regional attributes found that managing California?s
electric grid even at current levels of intermittent renewables is challenging. In
2017, there were long stretches (between 5 and 10 days) of little to no wind
generation. . . . Solar production averaged 1.7 in January, but reached 3.2
in June, re?ecting signi?cant seasonal variation. . . . Wind follows the same

7



seasonal variation. Current energy storage technologies are inadequate to address
these weather-related phenomena and cost-effective long-duration storage does not
currently exist.33

The Green Real Deal?s analytic ?ndings are too many to repeat in full in this report, some
of the most relevant to consideration of an RPS include:

I Today?s available technologies are insuf?cient to reach deep
decarbonization across all sectors in the long term. Decarbonization policy
must support dual tracks: incremental improvements in existing
technologies to meet 2030 targets, and technology innovations with
breakthrough potential needed to meet midcentury goals.34

It The impacts and costs of climate solutions have uneven impacts and absent
proactive policy effort, could be costly for those who are least able to afford
them.35

0 Energy ef?ciency, de?ned broadly, is likely to be the most cost-ef?cient
approach to decarbonization, and one of the most effective options across
all economic sectors.36

0 Electricity plays a critical role in decarbonization as both a source of
emissions (that is relatively easy to decarbonize) and for supporting
decarbonization of other sectors.37

0 Clean fuels renewable natural gas, hydrogen, biofuels) are critical
clean energy pathways due to the enormous value of fuels in providing
?exibility for energy systems. Policymakers will have to manage the
signi?cant operational issues that arise from a high penetration of variable
renewable electricity to ensure reliability, manage costs, and minimize
emissions.38

California and the other four states adopting clean energy standards or goals have
recognized that a ?exible approach will be needed that allows a multitude of paths to get to an
emissions-free portfolio. In September, California updated its prior RPS goal of attaining 50%

renewables by 2030 to a goal of 50% renewables by 2025, 60% renewables by 2030 and 100%

 

33 Green Real Deal at 13, Text Box 1.
34 Green Real Deal at 14.
35 Green Real Deal at 14.
36 Green Real Deal at 15.
37 Green Real Deal at 16.
38 Green Real Deal at 16.

113 

clean energy resources by 2045 .39 The next mover was New Mexico which in March 2019 updated
its RPS to require 50% renewable energy by 203 0, 80% renewables by 2040 and 100% carbon?
free resources by 2045.40 Two more states followed suit in April 2019, with Nevada updating its
RPS to require 50% renewables by 2030 and 100% carbon-free power by 205041 and the state of
Washington requiring 100% clean energy by 2045.42 Finally, in June 2019, Colorado passed a law
requiring its major investor?owned utility, Xcel, to be 100% carbon free by 2050.43

The Advisors also understand that there are new technologies coming to market that may
well be in position to provide true zero-emissions fossil fuel resources in the near- to mid-term
future, both in the development of cost-effective generation technologies that capture 100% of
carbon emissions and in the development of technologies to convert the carbon that is captured to
a useable product that can be sold rather than just storing the carbon which reduces costs of CCUS
signi?cantly and mitigates environmental concerns with storage. Technologies that improve the
effectiveness and reduce the costs of carbon capture are rapidly approaching commercial viability,
and, in combination with increased reliance on renewable resources, could rapidly accelerate
decarbonization. Leaving ?exibility to explore such potential solutions in addition to renewable
energy resources offers the greatest hope of achieving the mid-century decarbonization goals
necessary to avert the worst consequences of climate change.

Understanding the Baseline

In assessing a goal to be attained over a speci?c period of time, it is important to understand

the starting point correctly. It is the Advisors? understanding that, assuming industry-average

 

39 California SB 100.

4? New Mexico SB 489 44?22.
41 Nevada Senate Bill 358.

42 Washington 16.

43 Colorado SB 19?236.



capacity factors on existing generation portfolio, ENO would be starting from a 2019
baseline of 43.1% carbon-emitting energy resources (by kWh) and 56.9% zero-emission resources
of which less than 1% is from renewable resources. Once the projects recently approved by the
Council (both renewable and fossil-fueled) are constructed, which is currently anticipated to occur
by the end of 2020, portfolio by would be approximately 39.3% carbon-emitting
resources and 60.7% zero-emission resources with approximately 3.8% being renewable resources.
Per 2018 IRP, ENO will have 1,399 MW of capacity by 2021.44

While capacity (MW) does not necessarily translate directly to energy it is relevant
to the RPS discussion because ENO is required by the Midcontinent Independent System Operator
to maintain suf?cient capacity resources (generators or power purchase agreements) to
meet its peak load plus a reserve margin. In order to meet this requirement, ENO (like most utilities)
typically plans resource additions based on required capacity, and its IRP is analysis is generally
performed on a capacity basis. The 2018 IRP analysis indicates that there will be no need for ENO
to acquire new resources to serve its load until 2033,45 but that over the 20-year planning period
(2019-2038) current planning assumptions (which are based on generic planning
assumptions) indicate that ENO may deactivate up to 650 of its 1399 of which 495 MW
would be the natural?gas ?red Union Power Block 1 unit and about 150 MW would be Power
Purchase Agreements.47 These deactivations would, at least theoretically, allow for signi?cant
opportunity to convert carbon?emitting resources to zero-carbon resources beginning around 2033
without prematurely retiring existing resources or acquiring more resources than are needed to

serve load.

 

44 2018 IRP at 11-12.
45 20181RP at 5.

46 20181RP at 12.

47 2018 IRP at 13.

10



Comparing baseline to a few of the states that have recently augmented their RPS
with a clean energy component is helpful in considering the standard to be adopted. For example,
while ENO will be starting with about 3.8% renewables, California hit 31.36% in 2018,48 Nevada
was at 18.10% in 2017,419 and Washington is at 8.3% for 2019.50 So ENO is starting at a much
lower percentage of renewables than these states. However, when zero-emissions resources are
considered, the picture changes. ENO will be starting at 60.7% zero-emission resources, while
California only at 51.09% in 2018.51 Nevada was at 21.4% zero emissions resources in 2017,52
also well behind ENO, while Washington state was at 75.5% in 2017 with 67.7% of its load served
by hydropower.53 Given that ENO does not have large amounts of hydropower available to it,
ENO is already outperforming some of the leading states in zero-emissions resources. This
suggests to the Advisors? that while ENO may require more time to ?catch up? to the renewables
achievements of these states, ENO may very well be able to keep pace with their clean energy
goals.

Comments Filed by the Parties

Comments were ?led in response to the Council?s Resolution by eleven parties: ENO, AAE,
Air Products, C2ES, Audubon, Sierra Club, SERA, GSREIA, 350 NOLA, PosiGen Solar, and the
EFNO, which is a coalition of solar industry associations, and environmental and community

activists (350 NOLA, AAE, Audubon, the Deep South Center for Environmental Justice, PosiGen,

 

43 dataftotal system 

49 State of Nevada, Govemor?s Of?ce of Energy, 2018 Status of Energy Report, at 5, available at:
3%2080E.pdf

50 Washington Department of Commerce, EIA 2019 Report Summary and Detail, at 3, available at:
[gf??f?nerav-EIA-ZU I 
51 data! total system powerJitml

52 State of Nevada, Governor?s Of?ce of Energy, 2018 Status of Energy Report, at 5, available at:
I 3%2080E.ndf

53 Washington Department of Commerce, 2019 Biennial Energy Report at 28, available at:


ll

l13104813\V-6

Sierra Club, SREA and Vote Solar). This broad group of parties allowed a number of voices to be
heard - the utility, industrial customers, national and regional clean energy and renewables
advocates, the solar industry, and local community groups, and a wide array of viewpoints was set
forth. The parties set forth different goals and purposes for an RPS and different options and
models for the Council to choose from. The Advisers note that several of the members of the
EFNO coalition also ?led independent comments, as well as the coalition?s comments. To the
extent that the members of the coalition made arguments inconsistent with the coalition?s
arguments, the Advisors have assumed that the EFNO coalition Reply Comments supersede any
inconsistent comments by any of the EFNO coalition members, and such inconsistent comments
will not be addressed here.

A. What should an RPS target for New Orleans be?

Only one party, Air Products, entirely opposes an RPS requirement for New Orleans. Air
Products argues that there should be no RPS requirement at all, but if there is one, it should be
voluntary and it should only encourage ENO to acquire clean resources when there is a need for
additional generation and the proposed resource is the lowest reasonable cost resource to meet the

need and provide reliability of service.54

ENO advocates for a voluntary goals-based clean energy standard for New Orleans.55
ENO argues that the unintended consequences of a mandatory renewables-only RPS could harm
customers by raising costs and compromising reliability.56 ENO proposes that the Council adopt

a goal of 70% of retail sales served by zero-emission resources by 2030.57 ENO argues

that this would reduce carbon emissions by 605,000 tons and allow for bene?cial electri?cation

 

54 Air Products Comments at 1; Air Products Reply Comments at 1.
55 ENO Comments at 2.

56 ENG Comments at 11.

57 ENG Comments at 19.

12

ll3lO4813\V?6

projects to be encouraged in New Orleans and for energy ef?ciency and DSM to continue to
grow.58

The EFNO coalition argues for the adoption of a Resilient and Renewable Portfolio
Standard that would require 55% of retail sales to be served by resilient and
renewable resources by 2033 and 100% by 2040.59 GSREIA supports this position.60 In support
of this target, AAE argues that Google?s ?Project Sunroof? indicates that New Orleans could
generate 58% of their annual retail sales from solar roofs located within the city limits.61 They
also argue that expected retirement of the Union Power Block 1 unit in approximately 2032
and the potential for ENO to terminate its PPAs early also speak in support of this target being
achievable.62 AAE supports the deadline of 55% by 2033 and 100% by 2040 on the grounds the
climate science strongly indicates the need to get to net-zero carbon emissions by mid-century.63

C2ES argues for an RPS with 30% of electricity sales coming from renewable resources
and 90% from clean energy resources by 2030 with 60% from renewables and 100% from clean
energy sources by 2050.64

ENO argues that to its knowledge and understanding, providing enough generation to meet
55 let alone 100% of customer load with renewable-only technologies with 50% of the resources
located within Orleans Parish is a physical impossibility.65 ENO also notes that such resources

would not meet load shape, meaning that if ENO were to add solar PV generation to meet

a 55% RPS, approximately 70% of that generation would be in excess of needs at the time

 

58 ENO Comments at 20.

59 EFNO Reply Comments at 8.

6" GSREIA Reply Comments at 1.
61 AAE Comments at 4.

62 AAE Comments at 5-6.

63 AAE Comments at 6.

64 C2ES Comments at l.

65 ENG Reply Comments at 6.

l3



it is generated, and would be sold into the M180 market instead of used by ENO customers.66
ENO also argues that this proposal would also result in massive rate increases.67 ENO estimates
the cost of complying with such a mandate would raise system average rate by 30% or
more, even before incorporating the cost of adequate battery storage capacity.68 ENO also argues
that the use of Google Project Sunroof data as proof that 94% of roofs in New Orleans could host
an aggregate of 2.7 GW of solar PV is a ?super?cial and unsound approach to resource planning
that withers under the slightest scrutiny.?69 ENO notes that its own study of rooftop solar potential,
conducted in connection with its SMW rooftop solar project, which was a much more re?ned study
performed Brighter Louisiana, LLC, identi?ed only approximately 200 MW of potential rooftop
solar capacity in New Orleans, a mere 7.4% of the EFNO coalitions estimated"0

The Advisors support a mandatory standard. Voluntary standards leave too much
discretion to the utility on whether or not to comply and provide the Council with no method to
enforce the goals it has set. Whether the Council chooses a clean energy standard or a renewable
energy standard should be determined by which public policy goal the Council wishes to prioritize.
Rapid and deep decarbonization and the growth of the renewables industry can complement each
other, however, after review of the parties? comments and recent studies such as the Green Real
Deal and the Energy Futures Initiative analysis of the California market, the Advisors remain
concerned that prioritizing the growth of the renewables industry over all other carbon dioxide
emissions-free resources and rejecting the ?all of the tools in the toolbox? method will slow down

decarbonization and make it more expensive for ratepayers by narrowing unnecessarily the range

 

66 ENO Reply Comments at 6.
67 ENO Reply Comments at 8.
68 ENG Reply Comments at 8.
69 ENO Reply Comments at 20.
7? ENO Reply Comments at 20.

14

ll3lO4813\V-6

of options available to decarbonize. Thus, to the extent that the Council?s preferred public policy
goal is to pursue rapid, deep decarbonization, the Advisors recommend a Clean Energy Standard.
To the extent, however, that the Council would prefer to prioritize economic development, and
particularly the development of the local renewables industry in New Orleans and to be clear,
the Advisors consider local economic development to be a legitimate public policy purpose -- then
the appropriate goal would be a renewables-only RPS.

The Advisors agree that current climate science strongly indicates the need to get to net-
zero carbon emissions by mid-century. For that reason, the Advisors support at a minimum a
target of not less than 100% clean energy by 2050. The Advisors note that the concept of 100%
clean energy does not exclude the concept of 100% renewable energy (speci?cally which resources
should be utilized is discussed in further detail below). The Advisors have set forth in this report
for further discussion by the parties three different models, discussed in greater detail below that
are all aimed at achieving that target or better. It is the Advisors? opinion that the midcentury
target likely can be met with only reasonable bill impacts to customers through the use of a clean
energy standard. The Advisors have not seen convincing proof that the 100% clean energy by
2050 target can be met at a reasonable cost using only renewables, as is discussed further below.

The ?rst model set forth by the Advisors for discussion is a simple, traditional RPS model
with targets the Advisors believe, based on recent proposals in the renewables docket, can be met
at reasonable costs to customers, with the addition of an end?target clean energy standard. The
Advisors are encouraged by commitment to reducing carbon emissions, and accept that 70%
clean energy by 2030 is what believes upon informed analysis that it can do within its
business plan with an acceptable bill impact to customers. However, the Advisors would like to

see a target that is more ambitious, but still has at least a reasonable possibility for success.

15



Therefore, the second alternative plan set forth by the Advisors in this Report is a more aggressive
clean energy portfolio plan than what ENO has proposed.

The Advisors are not convinced that the proposed R-RPS set forth by the EFNO coalition
can be achieved at a reasonable cost to ratepayers within the timeframe suggested, therefore, the
third alternative set forth by the Advisors in this report is a modi?ed R-RPS plan with an effective
cost-control mechanism that the Advisors believe has a greater likelihood of success, though the
Advisors do believe that it is likely to be the least successful of the three alternatives put forth in
terms of actually being able to achieve its goals and stay within the Advisors? recommended cost
caps.

The Advisors believe that the EFNO coalitions? estimates of the potential of its plan for
success are based on incomplete and potentially faulty data. For example when the methodology
of Project Sunroof is examined, it becomes apparent that what is measured is not the actual
potential for rooftop solar generation in New Orleans, rather it is simply a measure of how much
sunlight a roof receives and how many solar panels it could ?t based solely on Google?s aerial
imagery, and Google?s estimate of how much electricity that many solar panels on that roof would
generate.71 It does not take into account zoning restrictions or historical designations that may
prohibit a homeowner from putting rooftop solar on their home or business, nor does it take into
account constraints on the distribution grid, such as the fact that distribution grid cannot
support rooftop solar in areas where the distribution system is underground, such as the Central
Business District and French Quarter. It also does not take into account the condition of the rooftop
-- it is typically recommended that rooftop solar panels be installed on relatively new rooftops,

since the solar panels have a long lifespan and it is costly to remove a solar panel installation to

 

7? See 

16

ll3104813W-6

replace an old roof and re-install it after the roof is replaced. Each of these factors reduces the
potential for rooftop solar in New Orleans. As ENO notes, it has produced a study on rooftop solar
potential in New Orleans in another docket that demonstrated only a fraction of estimate
would actually be available. While that report has not been submitted or examined in this
proceeding, it does suggest that the Council should gather more data before accepting or relying
upon the estimate of rooftop solar PV potential in the City.

B. What resources should count toward satisfying an 

The parties? comments in response to these questions fall into roughly three categories:
those advocating for all clean (zero?emissions) resources, those advocating for a wide array of
renewable resources, and those advocating for giving heavy priority to locally-sited distributed
generation renewable resources.

ENO argues for the adoption of a clean energy standard that would allow the inclusion of
future renewable resources, emission-free nuclear resources, distributed generation and utility-
scale solar PV resources; existing legacy renewable resources like conventional hydropower
projects; reductions in sales and kW demand through energy ef?ciency (Energy Smart) and
DSM programs, electri?cation, assisting key customers like to help reduce the use of older,
legacy assets that use fossil fuel, and customer owned and operated distributed generation-scale
renewables like rooftop solar PV and that take advantage of Council policies like NEM.72 ENO
suggests that if Combined Heat and Power or Fuel Cell technologies are permitted, it should be
clari?ed that they only count toward compliance if they are fueled with renewable resources.73

ENO opposes any type of ?carve-out? that mandates a speci?c amount in MW or

percentage of a single resource type or technology because it would hamper ?exibility and increase

 

72 ENG Comments at 21.
73 ENO Comments at 21.

17



costs.74 ENO argues that providing enough generation to meet 55%, let alone 100% of customer
load with renewable-only technologies with 50% of the resources located in Orleans Parish is a
physical impossibility and would not provide resources that meet load shape with the result
that approximately 70% of the renewable energy output would be excess at the time generated and
sold into MISO rather than used by New Orleans customers. 75 ENG also estimates that a
requirement that the 55% RPS proposal would increase system average rate by 30% or
more, even without adding the cost of battery storage.76 Air Products also advocates for allowing
all clean energy resources to count towards meeting the target.77

C2ES notes that New Orleans may wish to use its RPS mandate to help develop in?state
renewable resources and recommends that an economic study be conducted to determine realistic
targets for development of wind and solar for consumption in New Orleans using a geographic
information system ?lter to inform the suitability of any speci?c RPS carve outs (such as 10%
solar C2ES also recommends that to ?lock in higher levels of clean energy earlier, the city
should consider expanding the RPS to a 

The EFNO coalition proposes limiting the resources that qualify as renewable resources to
solar PV, solar thermal, wind and run-of?river hydropower resources, and would include as
?resilient? resources those renewable resources plus any enhancements like battery storage that
can perform both in ?islanded-mode? (standing alone or in a microgrid) and connected to the grid.80
After 2025, EFNO would require that at least 10% of load be met through resilient energy

resources connected to distribution grid and at least 30% with a combination of resilient

 

74 ENG Comments at 20.

75 ENO Reply Comments at 6.
76 ENO Reply Comments at 8.
77 Air Products Comments at 2.
78 C2ES Comments at 4.

79 C2ES Comments at 4.

3? EFNO Reply Comments at 7.

18



resources and renewable resources connected to distribution grid.81 EFNO would also
require that after 2025 at least 10% of retail sales be met through resilient resources and
renewable resources connected to distribution grid that are operated for the bene?t of low-
income customers.82

The EFNO coalition members generally oppose a clean energy resource standard.83 In
response to comments, several EFNO coalition members argue that proposal will
not result in new renewable generation being built and that relying on nuclear will raise costs to
customers because the Grand Gulf plant has been underperforming in recent years, signi?cantly
reducing its output and decreasing the amount of ENO load served by zero?emissions resources,
and that nuclear is more expensive than renewables.84

While the EFNO coalition members point to the problems at Grand Gulf as a reason that
only renewable resources should be relied upon to meet the Council?s chosen target, their argument
actually speaks in favor of a clean energy standard rather than against it. If, as they argue, 
nuclear resources are unreliable and costly, then it is more likely that to meet a 55% renewables
target, ENO would replace its failing nuclear resources with renewables. As current
nuclear resources represent approximately 56.9% of its energy resources, ENO could, in theory
reach a 55 renewables interim target by replacing its nuclear ?eet with renewables while keeping
all of its fossil fuel plants on line, resulting in no actual reduction in emissions. A clean energy
standard, however, would not permit such backsliding, because it would require ENO to increase
its percentage of clean energy every year. The EFNO position that only renewables should count

does support a public policy purpose of providing economic stimulus to and development of the

 

81 EFNO Reply Comments at 8-9.

82 EFNO Reply Comments at 9.

83 AAE Reply Comments at 2; SREA Reply Comments at 2-3.

84 AAE Reply Comments at 2; SREA Reply Comments at 1-2; 350 NOLA Reply Comments at 4-5.

19

l3104813\V-6

local renewables industry, but it does not support deep decarbonization as well as a clean energy
standard would unless it can be guaranteed that the new renewable resources will only replace
resources that emit carbon until such resources are fully replaced.

GSREIA opposes a clean energy standard but supports the inclusion of energy ef?ciency
and DSM in an RPS target.85 GSREIA also supports carve outs for speci?c renewables, including
locally sited renewables, arguing that the RPS policy is an opportunity not only to transition New
Orleans to cleaner renewable resources, but also to incentivize job opportunity, workforce training,
and innovation throughout the region.86 They support separating resources out by the categories
of distribution level, state boundaries, and all remaining deliverable resources.87

Nearly all parties support allowing the use of There is also general agreement that
RECs used to satisfy the RPS targets must be retired and be subject to veri?cation or certi?cation
and tracking by third parties, though there is some debate as how that should be done.89 If the
Council chooses deep decarbonization as the public policy to be prioritized, then the Advisors
recommend that RECs purchased without the associated energy be viewed as a transitional
mechanism to allow ENO the ?exibility to satisfy the RPS as cost-effectively as possible until
such time as ENO begins to see signi?cant deactivations that allow cost effective opportunities to
satisfy the RPS with ENO-owned resources. To that end, for a carbon emissions reductions goal,
the purpose should be to ensure that ENO is serving its load entirely through zero-carbon resources

by 2050, and the use of RECs without the associated energy to satisfy the requirement should be

phased out by that date. To the extent that fostering new growth of the renewable industry is the

 

35 GSREIA Reply Comments at l.

36 GSREIA Reply Comments at 3.

?7 GSREIA Reply Comments at 3.

83 Air Products Comments at 2; C2ES Comments at 1; ENG Reply Comments at 14.
89 Air Products Comments at 2; EN0 Reply Comments at 14.

20



public policy goal taking priority, however, use of RECs only for resources built after a particular
date would foster that goal.

ENO Opposes the use of multipliers for RECs because it could create unintended
consequences and lead to distorted or increased REC prices for customers?0 ENO recommends
that REC purchases should be treated as a fuel cost and recovered through the fuel adjustment
clause.91 The Advisors note, however, that to the extent that the Council wishes to prioritize
certain resources under the RPS without creating a mandatory carve-out, providing a multiplier
would give such resources an economic advantage in RPS compliance. If ENO can obtain a 1.5
credit for a Tier 1 resource, then it would be able to satisfy the RPS requirement using less of that
resource than by using a non-Tier 1 resource. For example, if ENO needs to obtain 100,000 
of electricity from a renewable resource in order to meet a particular RPS requirement, if it uses a
Tier 1 resource, for which it gets a 1.5 multiplier, then it only needs to obtain 66,667 of the
Tier 1 resource to meet the goal. Thus, for ENO to meet the requirement with a Tier 1 resource
that costs 14 cents per would be more cost-effective (14 cents/kWh 66,667 $9,333)
than meeting the requirement with a non-tier renewable resource that costs only 10 cents/Kwh (10
cents/kWh 100,000 $10,000), which should result in ENO choosing the preferred Tier 1
resource without increased costs to customers. While some parties might perceive this as an
economic distortion, what it allows the Council to do is to give a high-priority resource and
economic advantage that would ensure that if it gets ?close enough? to being competitive it can be
included without negative bill impacts to customers. In setting multipliers, the Council would
want to be conscious of the tradeoff between getting the desired resources incorporated and

actually offsetting fewer overall. If extensively utilized, such multipliers could reduce the

 

90 ENG Reply Comments at 15.
9? ENO Reply Comments at 15.

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l13l04813\V-6

overall number of from renewable resources (in the example given ENO actually purchases
33,333 fewer of renewable resources), but it should result in the more desirable resources
being chosen, so the resources put into tiers with multipliers should be carefully selected to ensure
that the overall value of prioritizing those resources offsets the lower number of carbon
emitting offset. This type of adjustment would allow the Council to take into consideration
the value of local jobs created, or local bene?ts from the reduction of emissions within Orleans
Parish.

C. How should an RPS be enforced?

 

ENO proposes a voluntary standard with no enforcement provision or penalty
mechanism.92 ENO opposes an alternative compliance payment as unnecessary where, as in New
Orleans, the regulator has authority over the utility?s resource planning process.93 Air Products
argues that to the extent the council adopts an RPS with a required target, the Council should
review compliance on an annual basis, and if ENO is found to be out of compliance, the Council
should initiate a docket with an opportunity for intervention and discovery to evaluate the non-
compliance and determine whether it was the result of reasonable and prudent decision-making,
and if it was reasonable and prudent, a penalty should not be imposed.94

Air Products also argues that the Council cannot determine the prudence of any compliance
plan or approve changes to a plan without a litigated proceeding with the opportunity for discovery,
testimony and a hearing.95

CZES supports the use of an alternative compliance payment to enforce the RPS as a

common option in use in many states with an RPS, noting that in some states it is recoverable in

 

92 ENG Comments at 17.

93 ENO Comments at 17.

94 Air Products Comments at 3.

95 Air Products Reply Comments at 10.

22

l13104813\V-6

rates and that some states use it to support future renewable energy deployments and energy
ef?ciency programs.96

The Advisors recommend an annual reporting requirement where ENO reports on its
attainment of the target in the prior year and provides its plan for meeting the compliance
requirement in the coming year. The Advisors note that they are recommending a cap on
expenditures (see more detail below), and the Advisors would recommend that when 
compliance report indicates that ENO has not met the target, ENO would be required to
demonstrate why its failure to meet the target was prudent, just and reasonable. If ENO can
demonstrate to the Council?s satisfaction that it could not meet the target without exceeding the
cap or that the resources needed to meet the target could not be procured in a prudent and
reasonable manner, ENO would be excused from meeting the target in that compliance year.
However, subsequent targets would not be changed, and ENO would have the obligation to ?catch
up? when it is able to do so without exceeding the cap.

The Advisors propose that where ENO has both failed to meet the targets and failed to hit
the cap, and Alternative Compliance Payment calculated in $/kWh of shortfall, limited by the cap
on expenditures, should be imposed to ensure that even in years where ENO is unable to comply
with the RPS targets, some level of progress toward the target can still be made. ENO is correct
that the company should only be required to pay penalties following an investigation that
determines that it failed to comply due to imprudent actions.97 To the extent that ENO can

demonstrate that making the Alternative Compliance Payment is the least-cost method of

complying with the RPS target, ENO should be permitted to recover the payment from ratepayers.

 

96 C2ES Comments at 4.
97 ENO Reply Comments at 15, citing Gulf States Utilities Co. v. Louisiana Pub. Serv. Comm 578 So.2d 71, 85
(La. 1991), S. Cent. Bell Tel. Co. v. Louisiana Pub. Serv. Comm 594 So.2d 357, 366 (La. 1992).

23



Cost recovery of the Alternative Compliance Payment should only be denied to ENO where it has
been demonstrated that failure to meet the RPS goal was imprudent such as where
compliance was possible at a lower cost than the alternative compliance payment. The Council
could then direct that any payments be made to a fund to be used for purposes to further the goal
of the RPS target ultimately chosen - whether that be to reduce local carbon emissions to the
greatest extent possible or to provide funding to local renewable and energy ef?ciency projects.
This structure should also have the result that if the alternative compliance payment is cheaper
than any other method of compliance, ENO would choose to make the payment which could then
be used to further the purposes of the RPS, rather than pursing other options. It would also have
the effect of ensuring that whenever the RPS target is not met, that full amount of expenditures up
to the cap are made in that year. The Advisors note that where a standard allowing a broad array
of resources to count towards meeting the targets is employed, the alternative compliance payment
is less likely to be invoked than a standard that relies on a limited selection of resources.
Alternatively, should the Council determine that it would prefer a penalty mechanism to
an alternative compliance payment, the Council could establish a mechanism whereby if ENO fails
to meet a target for a given year, it must appear before the Council and demonstrate why its failure
was the product of prudent, just and reasonable decision-making. To the extent that the Council
?nds failure to meet the target to not be prudent, just and reasonable, the Council would

then be able to impose a reasonable penalty.

24

l3104813\V-6

D. How should the Council protect ratepayers from unreasonable rate increases caused
by compliance with the 

 

ENO argues that arbitrary cost caps may not provide suf?cient ?exibility for meeting
Council mandates and that ENO should not be penalized for failing to adhere to cost caps absent
a ?nding of imprudence.98

Air Products argues that to the extent an RPS target is adopted by the Council, it should be
subject to a 1% rate cap, such that if acquiring or contracting for the resource being added to satisfy
the RPS target would cause rates to serve ENO to increase by 1% or more compared to either not
adding the resource or adding another resource that would otherwise be available, the RPS-
compliant resource would not be added.99

Air Products objects to the cost of Bene?cial Electri?cation of facilities being
passed through to ratepayers, arguing that the costs should addressed under Schedule
EOES-3.100

The EFNO coalition propose that low income customers should be exempt from paying
any costs associated with RPS compliance. ENO points out that, depending upon the de?nition of
?low income? employed, this could result in as much as 30% of residential customers being exempt
from paying for the RPS compliance. GSREIA agrees with proposal that all low-income
customers be exempted from the costs of compliance with an RPS mandate and, like SREA urges

the Council to act quickly to take advantage of federal tax credits.101 GSREIA also supports the

recommendation for a cap on administrative costs for administering the RPS of 

 

98 ENG Reply Comments at 17.

99 Air Products Comments at 4.

?00 Air Products Reply Comments at 6.
?01 GSREIA Comments at 5.

102 GSREIA Comments at 5.

25



C2ES notes that cost containment mechanisms like cost caps can be explicitly stated in
RPS legislation and can state an amount (typically a percentage) by which customer bills may not
increase due to the RPS, thereby limiting a utility?s expenditures.103

GSREIA supports either a penalty or an alternative compliance payment with funds from
such measures going into a ?green fund? to be used to ?nance renewable energy proj ects.104

The EFNO coalition also proposes an elaborate ?cost cap? mechanism in their proposed R-
RPS that does not actually cap the utility?s expenditures. Rather than a mechanism where a cost
cap is established and expenditures beyond the cap are deemed imprudent, and not eligible for
recovery from customers, it sets forth a limit on what can be collected from customers in the year
the costs are incurred and allows ENO to amortize the remaining costs it incurs over a twenty?year
period.105 This would allow R-RPS compliance at any cost, which, given analysis that
compliance with a 55% RPS by 2033 could raise its rates by as much as 30% is a signi?cant
concern. The overall package of the proposed by ENFO ensures that ENO must choose
from a limited number of relatively high cost resources for compliance, in a manner that would
require ENO to replace some of its existing zero-carbon resources with these high-cost resources
(ENO cannot reach 55% renewables by 2033 without deactivating at least some portion of its
nuclear ?eet, which currently provides 56.9% of its energy) and puts no limit on the level of costs
ENO would be required to incur in order to comply. The Advisors are deeply concerned that this

would result in signi?cant rate increases with no mechanism in place by which the Council can

oversee the level of expenditures.

 

C2ES Comments at 5.
GSREIA Reply Comments at 4.
?05 EFNO Reply Comments at 14.

26



The Advisors recommend a cap on ENO incremental expenditures to comply with the RPS
of 1% of total retail revenues. Based on the Advisors? estimate of current total retail
revenues of approximately $609.7 million, this would allow incremental expenditures by ENO of
approximately $6.1 million per year, which would increase as total retail revenues increase
over time. While the speci?c impact on particular rate classes of an increase of 1% of total
retail revenues would vary depending on the cost allocation mechanisms approved by the Council
in the rate case, the Advisors estimate that the customer bill impact would vary between 1.05% for
the class with the greatest impact and 0.86% for the rate class with the lowest impact, except for
the Lighting rate class, which would only experience a 0.28% increase. The cap would apply to
incremental expenditures -- meaning the difference between what ENO would have otherwise
spent to meet the requirements of its load and what it spent to meet the requirements of its load in
a manner that complies with the RPS. The Advisors would not envision that any of 
currently existing or already approved resources would count toward this limit, since they were in
place prior to the establishment of the RPS and although they may be counted toward compliance,
they are not true ?incremental? costs because they will go forward even if the Council decides not
to adopt an RPS at all. This would also include the Energy Smart program budgets in pursuit of
the Council?s pre?existing 2% goal. To the extent that ENO determined in any given year that the
most cost-effective way to comply with the RPS would be to invest in the Energy Smart program
beyond the Council-approved budget to make the 2% DSM goal, then Energy Smart costs
above the approved budget would count toward the RPS expenditure cap, but the Council-
approved Energy Smart budget would not. If the Council decides to implement such a cap, more
input will be needed from the parties regarding how best to accurately count ?incremental? costs

for various types of resources for the purposes of compliance with the expenditure cap.

27



The Advisors also recognize concerns that an annual cost cap would limit is
?exibility in acquiring resources, and that it may be prudent for ENO to make a large expenditure
in a single year that meets the RPS requirements for several years. To that end, the Advisors would
recommend that the Council?s rule retain the ?exibility for ENO to propose and the Council to
approve a compliance plan that meets the target for a block of years that observes the cost cap and
the targets for the total block of years without being required to comply with the particular target
and cost cap for any speci?c year within that block of years. Thus, if an attractive opportunity
arises for an investment in a larger project, ENO should be able to propose it and the Council to
consider it and render a decision as to whether it is a prudent, just and reasonable method of
compliance with the Council?s RPS targets.

B. Other issues raised by the parties

There were several additional issues raised by parties beyond the speci?c questions posed
by the Council.

The EFNO coalition, some of whose members participated in the recent rulemaking to
change the Council IRP Rules would now change those IRP Rules through this RPS proceeding
without notice or opportunity for other parties interested in the IRP Rules to object or comment,
which would lack transparency and would not afford suf?cient process to parties with an interest
in the IRP Rules.106 Similarly, SREA, who did not participate in the recent IRP Rules rulemaking
docket, advocates for changes to the IRP Rules. The Advisors do not believe it is necessary or
appropriate to modify the Council?s IRP Rules through this RPS rulemaking docket. First, it is
not necessary because the IRP rules currently require ENO to develop at least one Flaming

Strategy that re?ects known regulatory policy goals of the Council, which would include whatever

 

EFNO Reply Comments at 8.
28



RPS is adopted by the Council.107 This would allow the IRP to produce least cost portfolios that
attain the RPS targets across several potential future Scenarios. The Council will then be able to
see how the portfolios including the RPS differ from portfolios that are produced without the
constraint of an RPS. Thus, modi?cation of the IRP Rules to accommodate the output of the RPS
rulemaking is not necessary.

The EFNO coalition also attempts to modify the Council?s Net Energy Metering Rules
through this RPS rulemaking docket by adding new rights for NEM customers, including a
provision that would grant Net Energy Metering customers the right to continue receiving service
under the net metering tariff and NEM rules in effect at the time they apply for net energy metering
service for a period of at least twenty years.108 Again, making such a change to the Council?s
existing NEM rules without notice or opportunity for affected parties to comment lacks
transparency and fails to offer said parties suf?cient due process. In addition, the proposal that
customer-generator facilities not be required to pay additional or separate charges for electric
service that would not apply if they were not a customer?generator is made without reference to
any information regarding whether such customers require additional services and impose
additional costs on the system that would be imposed on non-participating customers if not paid
by the customer-generator.

The EFNO coalition also advocates for the creation of an R-RPS community advisory
group with expansive powers that would be funded up to $50,000 to cover the group?s
administrative expenses. 109 The budget for the group would be paid by ratepayers as in

incremental cost of RPS compliance.110 The Council would be required to consult with this group

 

Electric Utility Integrated Resource Plan Rules of the Council of the City of New Orleans, Section 7.D.3
?08 EFNO Reply Comments at 11.

?09 EFNO Reply Comments at 14-15.

?0 EFNO Reply Comments at 15.

29



and receive a recommendation from them prior to utilizing revenues from the proposed
Public Purpose Fund to establish a Green Bank.111 If the community advisory group
recommended it, the Council would be required to consider whether it is necessary to waive the
recovery of incremental costs from low-income households.112 The R-RPS community
advisory group would also be required to present recommendations to the Council for changes to
the recently adopted Community Solar Rules.?3 The R-RPS community advisory group would
also work with the Of?ce of Supplier Diversity to develop a certi?cation for vendors of renewable
energy resources and related services that would qualify as Tier 1 and Tier 2 resources under the
proposed rule.114 The R-RPS community advisory group would also consult with ENO
on the development of additional ?nancial incentives, grants, and rebates, assignable to a third-
party provider (such as a rooftop solar company) to support and develop the utilization of resilient
energy resources for certain types of customers and the R-RPS community advisory group would
identify geographic zones for which ENO would be required to provide for the equitable
distribution of total publicly-funded ?nancial supports or incentives for resilient resources. 1 15

In short, the EFNO coalition?s proposal is a blatant attempt to re-open several other Council
rulemakings (NEM, IRP and community solar, in particular) and revise those rules outside of the
normal rulemaking process and without notice to potentially affected parties, and it would delegate
an extensive amount of the Council?s regulatory authority to an unelected community advisory

group with no accountability to the public and give that community advisory group an

unprecedented level of control over the Council?s Agenda. A delegation of this level of authority

 

1? EFNO Reply Comments at 15.
?2 EFNO Reply Comments at 15.
?3 EFNO Reply Comments at 12.
?4 EFNO Reply Comments at 12.
?5 EFNO Reply Comments at 12.

30

113 

to an advisory committee of the Council would be contrary to City Code Section 3-127 regarding
the creation of Advisory Committees, which provides:
The Council may appoint advisory committees which shall exist for not more than one year
from the date of appointment, but which may be reappointed from year to year. The
members of advisory committees shall not be paid; their function shall be limited to counsel
and advice, and their expenses, if any, shall be paid from appropriations to the Council.

Advisory committees shall have no employees, but the Council may cause it employees to
furnish such service as may be needed by said committees.

Section 3-127 simply does not allow for the structure proposed by EFNO for its R-RPS
Advisory Committee. The committee could not be proposed for a three-year period, as
proposed,116 its role would have to be limited to providing counsel and advice to the Council
meaning that it could not mandate which issues the Council must consider, and its proposed
$50,000 budget could not be paid by ratepayers as an incremental RPS compliance cost.117 The
proposed R-RPS Advisory Group should be rejected.

Finally, while the Advisors would recommend that the Council adopt a rule that is ?exible
enough to continue to function properly through various market conditions and technological
developments, the Advisors nevertheless recommend that the Council periodically review the RPS
policy and evaluate whether any adjustments need to be made. The Advisors suggest that the
Council could undertake this periodic review every three years upon receipt of IRP analysis,
which would provide the Council with signi?cant information regarding portfolio,
anticipated future needs, and projected costs of compliance.

Workable Models for the Council to Consider

One of the critical points for the Council to decide, which will have the greatest in?uence

on the rule ultimately adopted is which public policy purpose the Council wishes the RPS to serve.

 

?6 EFNO Reply Comments at 14.
?7 EFNO Reply Comments at 14.

31

ll3lO48l3\V-6

Recognizing that RPS designs serving different purposes may look substantially different, for the
sake of this Report, the Advisors have included an Appendix with three different potential RPS
standards to illustrate what the ?nal rule could look like to help inform the Council?s decision
making. ENO proposed a CBS that would pursue the goal of decarbonization and reducing carbon
emissions. The EFNO parties (a coalition of community activists, environmental activists, and
solar industry trade groups and companies) on the other hand, proposed a Resilient and Renewable
Portfolio Standard with stated purposes to (1) strengthen New Orleans through a focus on energy
resilience and local energy resources, (2) ensure that the bene?ts of renewable energy are equitable,
accessible, and affordable for all residents; (3) providing new economic opportunities to
underserved communities by expanding and diversifying the energy workforce and enabling
programs that reduce energy cost burdens on low-income residents; and (4) attract and retain
companies and industries that value ready access to renewable energy resources118 As might be
expected, a standard meant to pursue deep decarbonization and rapid reduction in emissions will
differ somewhat from a standard meant to stimulate the local renewable economy, create new jobs,
and provide rate support to low-income residents. Both goals are legitimate public policy purposes,
but as proposed by the parties in their comments in this docket, they are not fully consistent with
each other. The Advisors do not support either the CBS as proposed by ENO or the as
proposed by the EFNO coalition, though the Advisors have attempted in this Report to provide the
Council with not only a traditional RPS standard to consider, but also a more aggressive CBS and
an R-RPS that would be less of a straight up economic development measure and more consistent
with both the goal of rapid reductions in emissions with a lower impact on customer bills and more

consistent with sound utility regulatory principles. As is previously stated, these three models are

 

?8 EFNO Reply Comments Appendix A, Section 1. Purpose.
32

113l04813\V-6

all merely illustrative examples that the Advisors believe would be Viable, and ?exibility remains
to continue to adjust any of them to better suit the Council?s policy goals and concerns.
A. Alternative 1: Renewable Portfolio Standard

The ?rst alternative presented by the Advisors is a traditional, simple Renewable Portfolio
Standard with the addition of clean energy requirement as the end point of the standard. Draft
rules that would implement this Standard are in Appendix A to this Report, starting at page 1. In
this alternative, the Advisors set forth targets based on the Advisors? assessment of what would be
reasonably achievable under a 1% on total retail revenues expenditure cap using data and
assumptions from renewables resource portfolio cost bene?t analysis modeling in Docket
NO. UD-18-06 (the 90 MW renewables portfolio case) to project costs and rate impacts and using
relevant load projections and resource data from 2018 IRP. Based on the Advisors?
calculations, a renewables goal of 10% by 2025, 15% by 2030, 23% by 2035 and 35% by 2040
should be reasonably achievable under an expenditure cap of 1% of total utility retail revenues. If
the renewables only replace resources that are currently producing carbon emissions, a 35%
renewables goal by 2040 would have ENO at approximately 95% carbon-free in 2040, thus adding
the additional requirement that ENO must meet 100% of its energy needs through zero?carbon
resources would allow ENO to meet the standard by retaining all of its current zero-emissions
resources, meeting 35% of its needs through the required renewable resources and ?lling the
remaining 5% of its needs through either renewables or other zero-emissions resources such as
nuclear to natural gas with effective carbon capture, utilization and storage, or other carbon?free
technology. If the clean energy requirement is omitted from this standard, then it is possible that
some level of current zero emissions resources would be replaced with renewables rather than the

carbon-emitting resources, reducing the effectiveness of the model as a decarbonization measure.

33



Rather than creating a mandatory carve-out for certain types of renewables to meet this
standard, the Advisors have included in this model multipliers for two ?tiers? of resources. A
multiplier does not require ENO to use a certain type of resource, but rather gives ENO more credit
for using those resources than for others in other words, it gives those resources a cost advantage
over other resources, as discussed above. In the draft Alternative 1 RPS provided, the Advisors
put into Tier 1, earning a 1.5 multiplier, local resources cited within the City, including renewable
energy resources, distributed generation resources of not more than 5 MW (such as net metering
and community solar resources), demand-side management and energy ef?ciency (such as the

?9 of commercial or industrial equipment

Energy Smart Program), and bene?cial electri?cation
that would result in reduced carbon intensity. This list of resources can easily be adjusted, the
Advisors selected these resources as those that would likely be the most directly bene?cial to New
Orleans residents and businesses by reducing carbon emissions within the City and/or having the
potential to offset energy bills for some customers. Tier 2 resources, which are essentially any
renewable resource outside of New Orleans, would receive only a 1.0 multiplier. The Advisors
believe that permitting the use of RECS for compliance would give ENO an additional option for
compliance when considering how to most cost-effectively comply with an RPS, and thus use of
RECS is permitted for compliance, and ENO would be permitted to carry RECS forward for up to
2 years to allow ENO to use excess RECS created in one year to offset requirements in the
following year.

In order to keep compliance and enforcement simple in the Alternative 1: RPS model, the

Advisors included a requirement that ENO annually present a compliance report explaining

 

?9 ?Bene?cial electri?cation? means converting industrial, transportation, or other processes from fossil fuel (such
as natural gas, gasoline, or oil) to an electric process where the resulting increased use in electricity still results in
fewer carbon emissions than the process it is replacing -- i.e. where, taking into account the electric utility?s
emissions, the result of the conversion is a net decrease in total C02 emissions.

34



whether or not the targets were met in the prior calendar year, and setting forth procurement
plan to satisfy the RPS requirement going forward, demonstrating that it is the least-cost plan. If
ENO failed to comply with the RPS requirement, it would be required to ?le a notice of
noncompliance detailing the shortfall, the cost of the shortfall and plan to meet the shortfall
in the following year. Should the Council ?nd that ENO lacked reasonable cause for the failure
to comply, the Council would have the option of ?nding that ENO should not recover the cost of
meeting the shortfall from ratepayers. Should a pattern of noncompliance occur, the Council
would have the option of applying additional penalty measures.

Under the proposed Alternative 1: RPS, the Advisors have also included a cost cap for RPS
compliance of 1% of plan year total utility retail sales revenues. If ENO can demonstrate that the
incremental cost of RPS compliance would exceed this cap, then ENO would be permitted to
reduce its procurement down to the cost cap level. However, the goals in future years would not
be reduced. The Advisors have also included in this option a large customer cap that would prevent
large customers from being required to pay for a disproportionate share of RPS compliance costs

The Advisors believe that this approach is based on analytics of available data
demonstrating that it is reasonably achievable, though, as with any forward-looking analysis it is
based on certain assumptions which may or may not prove to be true in the future. The targets
produced in this manner are also generally consistent with targets adopted in other jurisdictions
with vertically integrated utilities. While this strategy does help advance the goal of rapid, deep
decarbonization, the signi?cant focus on renewable resources does result in the omission of certain
carbon-reducing measures from the RPS. The Advisors believe that this model has a relatively
high probability of success in being able to meet the targets set forth while remaining within the

expenditure caps.

35



B. Alternative 2: Renewable and Clean Portfolio Standard

The second alternative portfolio standard the Advisors set forth in this report is a
Renewable and Clean Portfolio Standard that would aggressively pursue deep
decarbonization and emissions reductions, particularly within the City. It would have the goal of
rapid decarbonization while ensuring that the City has a safe and reliable power supply at a
reasonable cost and with as much ?exibility as possible. Rather than requiring ENO to acquire a
speci?c percentage of renewables, it would require ENO to convert its entire portfolio to zero-
emissions resources. A wide range of currently known and yet to be developed zero-emissions
energy technologies would be employed with priority given to measures that reduce emissions
within Orleans Parish and measures that are sited within Orleans Parish.

This alternative would have annual targets, but in recognition that capacity is typically
added in speci?c sizes that may or may not match up to any speci?c year?s RPS requirement,
would allow ENO to propose a project that would meet the requirement for a block of years and
demonstrate to the Council that the proposed plan is a prudent, just and reasonable method of
meeting the RPS requirement. One bene?t to a CBS requirement rather than only an RPS
requirement is that it would prevent the addition of renewables from replacing zero-emission
resources, resulting in no gain in emissions reductions. To be clear, while a clean energy standard
would permit the use of nuclear and of natural gas and other fossil resources with a truly effective
carbon capture mechanism, it would also allow all emissions-free renewables to be considered on
an equal footing. This has the advantage of giving the utility maximum ?exibility to acquire the
resources most closely matched to the needs of load at the lowest reasonable cost. If, as
many parties comment, renewables are truly cost-effective as compared to other resources, they

should succeed under a clean energy standard. Under the Alternative 2: RCPS model, in addition

36

llJlO4813\V-6

to zero-emissions sources of generation, the Advisors have included energy ef?ciency, DSM, and
Bene?cial Electri?cation as resources.

While ENO proposed a simple, voluntary CES of 70% zero-emissions resources by 2030,
in light of ENO starting from a position of 60.7% zero-emissions resources in 2021, the Advisors
believe this goal represents what ENO is con?dent it could do, but does not require ENO to stretch.
In short, it is not ambitious enough, and it is incomplete. In the Alternative 2: RCPS model, the
Advisors propose a standard that is more aggressive on carbon emissions reductions and has
stricter compliance requirements, but which, in the Advisors? opinion, would still have a
reasonable chance of success. This alternative model would require ENO to achieve a 100% net
zero-emissions portfolio of resources by 2040, with no more than 20% being met through RECs.
This recognizes that ENO will potentially have signi?cant deactivations of its fossil-?red
resources beginning around 2033, which should create a real opportunity to move toward zero-
emissions resources. The RCPS model included in this Report would then phase out the use of
RECS between 2040 and 2050, requiring ENO to serve New Orleans with only zero-emissions
resources. Near-term goals would have ENO reach 70% zero-emissions by 2025, not more than
25% of the requirement being met through RECs. By the year 2030, the RCPS requirement would
increase to 80% and the allowed portion of the requirement that can be achieved through RECS
would fall to 20%.

Rather than establishing a requirement that a speci?c percentage of RCPS
compliance be met only through renewable resources, the Alternative 2: RCPS model creates three
tiers with the top two tiers receiving multipliers. The Alternative 2: RCPS model would not
prioritize the economic development of the local renewables industry, but rather would prioritize

the reduction of carbon emissions in Orleans Parish. Tier 1 resources would include any resource

37



or measure that reduces carbon emissions from existing sources within Orleans parish, which
would include Bene?cial Electri?cation, EV charging stations, and CCUS on existing generators.
These resources would receive 1.5 multiplier due to their direct impact on reducing emissions
within Orleans Parish. Tier 2 resources would include any renewable or zero-emissions distributed
generation resource in Orleans Parish and any utility DSM or conservation program, such as
Energy Smart. These resources would receive a 1.25 multiplier. Tier 3 resources, which would
count toward compliance, but would have no multiplier applied would be any renewable energy
resource or zero-emissions resource not in Orleans Parish but that is deliverable into the M180
region. There is no requirement that only resources after a particular date count, because the goal
is not to provide an incentive for new renewable resources to be built, and it is the Advisors? intent
that existing zero-emissions resources be counted for compliance purposes.

For enforcement the Alternative 2: RCPS model would require an annual report regarding
the prior year?s compliance with the targets and the plan for meeting the next year?s requirements.
The annual compliance report would also contain data regarding how many MWH were produced
by each resource, including how many were saved by DSM and energy ef?ciency and
conservation and the average cost per to enable the Council to understand the costs of the
various resource types. In the event that ENO was unable to comply with the RCSP target for a
given year, ENO would make an alternative compliance payment into a fund on a
$/kWh shortfall basis. As long as ENO can demonstrate that the alternative compliance payment
is the least-cost method of complying with the RCPS, ENO would be allowed to recover the
payment from customers. The Council would establish the fund and how it is

administered, the Advisors would suggest that to be consistent with the RCPS goal of achieving

38



rapid decarbonization, the fund prioritize projects designed to reduce carbon emissions from
existing sources of such emissions in Orleans Parish.

The Alternative 2: RCPS model would also cap RCPS compliance cost impact at 1% of
total retail sales revenue. If the cost of compliance would exceed that cap, ENO would be excused
from any compliance beyond the point at which the cap was reached, though the requirement for
future years would not change, and ENO would be expected to catch up to the target when it can
do so while remaining under the cap. Should ENO desire to exceed the cap for a given year, the
Council would be able to authorize ENO to do so if ENO can demonstrate it would be prudent,
just and reasonable to do so.

C. Alternative 3: Resilient and Renewable Portfolio Standard

The third alternative standard presented in this report is a standard prioritizing resiliency
and economic development of the renewables industry in New Orleans, consistent with the stated
purposes of the EFNO coalition?s proposal. While many of the elements of the EFNO coalition?s
proposed R-RPS were unworkable or inappropriate, this alternative attempts to construct a model
that would be both workable and appropriate for an RPS. It retains the renewables targets of the
R-RPS, but signi?cantly simpli?es the model. It also retains the three tiers of resources with minor
changes. Tier 1 would still be a separately-metered resilient energy resource operating as party of
a dispatchable microgrid, Tier 2 would be a renewable distributed generation resource located in
Orleans Parish as well as any utility DSM or conservation program, net energy metering,
community solar and programs directly bene?ting low-income customers and Tier 3 would be any
renewable energy resource not located in Orleans Parish that is located in MISO or deliverable to

the M180 region.

39



The Advisors have also in this model incorporated the RPS expenditure cap of 1% of utility
total retail sales. The Advisors do not have suf?cient data regarding the anticipated costs of the
Tier 1 and Tier 2 resources under this standard to project the likelihood of success of this design
in meeting the targets while remaining within the compliance expenditure cost cap. IT may very
well be the case that the success of the program is signi?cantly hampered by the application of this
cap. The Advisors note, however, that to the extent the program would have a greater impact on
customers, it may not be a program that can be justi?ed as reasonable to require of ratepayers in
light of the availability of other RPS designs that could achieve similar levels of the deployment
of renewables and reduction in carbon emissions at signi?cantly lower costs using a more ?exible
de?nition of eligible resources.

Next Steps/Further Procedures

 

The Advisors note that the remaining procedural schedule allows for comments on this
Report to be ?led no later than October 1, 2019 and reply comments to be ?led no later than
October 15, 2019. The Advisors recognize that the procedural schedule in this docket anticipated
responses to the four questions set forth in Resolution No. and did not anticipate that
parties would go beyond the scope of Resolution and provide alternative proposals such as 
proposal for the adoption of a Clean Energy Standard voluntary goal rather than a
mandatory RPS and EFNO coalition?s proposal for a Resilient and Renewable Portfolio Standard.
Consideration of these additional proposals, the requirements of Resolution No. and
statewide trends toward decarbonization resulted in the ultimate development of the three
alternatives presented as opposed to a single draft RPS standard in this report.

Recognizing, that the alternative proposals put forth by the parties were not submitted with

and supported by detailed analyses in this docket and, recognizing that inherent in each of the

40

1 l3l04813\V?6

alternatives presented in this Report is a cap on the impact on total ratepayer bills of one percent

of total utility annual retail sales revenue. The Advisors recommend that parties in their

comments on this Report, provide any analyses in support or opposition to the alternatives

presented herein or to parties? original proposals as ?led in the original comments and reply

comments. Further, to the extent parties believe that the Advisors? recommended cap on the

impact on total ratepayer bills is not set at the appropriate level, the parties should provide analyses,

including bill impact analyses, in support of any alternative cap level.

Conclusion

The Advisors welcome the comments of the parties as to the purposes that the Council

should prioritize for an RPS and on the three models set forth here for discussion to assist the

Council in determining which type of RPS standard to adopt.



RESPECTFULLY SUBMITTED:



WBeatmann, Jr. (#26189)

Dentons US LLP

650 Poydras Street, Suite 2850
New Orleans, LA 70130
Telephone: (504) 524-5446
Facsimile: (504) 568-0331

Email: iay.beatrnann@dentons.com

Clinton A. Vince

Emma F. Hand

Presley R. Reed, Jr.

1900 Street, NW.
Washington, DC. 20006
202-408-6400 (Telephone)
202?408-6399 (Facsimile)
clinton.vince@dentons.com
emma.hand@dentons.com
presley.reedjr@dentons.com

Advisors to the Council of the City of New Orleans

41

CERTIFICATE OF SERVICE
I hereby certify that a copy of the foregoing pleading has been served upon the following

parties of record by electronic mail on this 3rd day of September 2019.

 

Beatmann, Jr.

Service List for UD-19-01

42



APPENDIX A
DRAFT STANDARD ALTERNATIVES FOR THE PURPOSES OF PUBLIC COMMENT

New Orleans Renewable Portfolio Standard

For the purposes of public comment, and in response to the Initial and Reply Comments ?led by
the Parties pursuant to Resolution R-19-109, the Advisors include herein conceptual drafts of a
traditional RPS structure and two alternative standards. These drafts are structured similarly for
comparison, and represent three different approaches to portfolio standards proposed
among the parties in the Docket. The drafts are intended to recognize the primary objectives of
each alternative, the policy differences, and the data and process needed to determine compliance
costs and cost caps with implementing the alternatives.

Alternative 1 - A Traditional Renewable Portfolio Standard with a Long-Term
Clean Energyt Requirement

SECTION 1 OVERVIEW

It is the intent of the Renewable Portfolio Standard to capture the bene?ts of renewable
power by requiring the Utility to increase the amount of renewable generation in its generation
portfolio at a reasonable cost to ratepayers, while achieving a long term clean energy goal.

SECTION 2: DEFINITIONS

?Bene?cial Electrification? means any program or process that replaces direct fossil fuel
use as a source of power and heat with electricity in a way that -- when the electric utility?s
emissions are accounted for reduces overall emissions, including, but not limited to,
charging infrastructure supporting electri?cation of motor vehicles, electri?cation of home
and commercial appliances that use natural gas, and electri?cation of municipal and
commercial operations that currently rely on fossil-fuel use to power equipment.

?Community Solar Generation Facility? or Facility? means a solar energy
facility that meets the de?nition of a Community Solar Generation Facility under the
Council?s Community Solar Rules.

?Community Solar Program? means a program that encompasses the facilities, entities,
functions and requirements implemented by the Council?s Community Solar Rules.

?Community Solar Rules? means the Community Solar Rules for the Council of the City
of New Orleans adopted by Council Resolution No. R-l9-111 (and as modi?ed by any
subsequent Council action).

?Conservation Program? means a program in which a utility company furnishes home
weatherization services free or at reduced cost or provides free or low cost devices for
saving energy, such as energy ef?cient light bulbs, ?ow restrictors, weather stripping, and
water heater insulation.

?Cost of Compliance? the cost of compliance with the RPS shall be the incremental costs
incurred by ENO over and above the costs to serve its load that are attributable solely to
the compliance with the RPS policy.

Draft Standard Alternatives for the Purposes of Public Comment

?Council? refers to the Council of the City of New Orleans
?Customer? means a retail electric customer account holder of the Utility.
means the Council Utilities Regulatory Of?ce.

?Demand-Side Management? or means a utility action that reduces or curtails
end-use equipment or processes, often used to reduce customer load during peak demand
and/or in times of supply constraint.

?Distributed Energy Resource? or means a generator that is located close to the
particular load it is intended to serve, and is operated primarily to serve that load.

?Distribution System? the portion of the transmission and facilities of an electric system
that is dedicated to delivering electric energy to an end-user.

?Energy Ef?ciency Programs? means programs that are aimed at reducing the energy
used by speci?c end-use devices and systems, typically without affecting the services
provided. Examples include high-ef?ciency appliances, ef?cient lighting programs, high-
ef?ciency heating, ventilating and air conditioning (HVAC) systems or control
modi?cations, ef?cient building design, advanced electric motor drives, and heat recovery
systems.

?Green-e? means the formal certi?cation of RECs provided by the Center for Resource
Solutions' Green-e? certi?cation program, distinct from the tracking of RECs.

?Low-Income Customer? means a Customer whose gross annual household income is at
or below 50 percent of Area Median Income for the relevant period or who is certi?ed as
eligible for any federal, state, or local assistance program that limits participation to
households whose income is at or below 50 percent of Area Median Income.

means the Midwest Renewable Energy Tracking System, a web-based system
used by power generators, utilities, marketers, and quali?ed reporting entities. M-RETS
registers projects in all states and provinces across North America. M-Rets tracks
Renewable Energy Certi?cates and facilitates REC transactions by issuing a
unique, traceable digital certi?cate for every me gawatt-hour of renewable energy
generated by registered units or imported into its system.

?Mierogrid? means a group of interconnected loads and distributed energy resources
within clearly de?ned electrical boundaries that acts as a single controllable entity with
respect to the grid. A microgrid can connect and disconnect from the grid to enable it to
operate in both grid?connected or island mode.

means the Midcontinent Independent System Operator, Inc.

?MISO-Conneeted Renewable Energy Resource? means a renewable energy resource
that is ?rst put into service on or after January 1, 2020 and is interconnected to
transmission?level voltage within the Midwest Independent System Operator?s footprint.

2

l13104813\V-6

Draft Standard Alternatives for the Purposes of Public Comment

means New Orleans Net Energy Metering as de?ned by NEM Rules adopted by
Council Resolution No. R.07-132 (and as modi?ed by any subsequent Council action.

Rules? means the New Orleans Net Energy Metering Rules adopted by Council
Resolution No. (and as modi?ed by any subsequent Council action).

means the Renewable Portfolio Standard.

?Renewable Energy Credit? or means a contractual right to the full set of non-
energy attributes, including any and all credits, bene?ts, emissions reductions, offsets, and
allowances, howsoever entitled, directly attributable to a speci?c amount of electric energy
generated from a renewable energy resource. One REC results from one of electric
energy generated from a renewable energy resource.

?Renewable Energy Resource? means a facility that generates electricity using solar
thermal, photovoltaic, wind, geothermal, fuel cell using renewable fuels, hydroelectric
generation, ocean wave, ocean thermal, or tidal current, and any additions or enhancements
to the facility using that technology. For a Renewable Energy Resource to qualify for
compliance purposes, any RECs associated with that resource in the compliance year must
be retired.

?Retail Compliance Load? means the total jurisdictional retail sales, measured in kWh,
for an electric utility during an annual period.

?Utility? refers to any utility providing electric service to customers in the City of New
Orleans and regulated by the Council.

SECTION 3: RENEWABLE ENERGY PORTFOLIO STANDARD

a) Percentage Requirements

1. The utility shall meet the following speci?c renewable portfolio standard
percentage requirements to include renewable energy in its electric energy supply
portfolio:

i. no later than January 1, 2025, renewable energy and other eligible
resources shall comprise no less than ten percent of the utility's
total retail sales;

ii. no later than January 1, 2030, renewable energy and other eligible
resources shall comprise no less than ?fteen percent of the utility's
total retail sales;

no later than January 1, 2035, renewable energy and other eligible
resources shall comprise no less than twenty-three percent of the
utility's total retail sales; and

iv. no later than January 1, 2040, renewable energy and other eligible
resources shall comprise no less than thirty-?ve percent of the
utility's total retail sales



Draft Standard Alternatives for the Purposes of Public Comment

v. no later than January 1, 2040, 100% of sales must be achieved with
zero-emissions resources, including renewable energy and other eligible
resources with no carbon emissions produced.

2. Large Customers Target Cap. The renewable portfolio standard established by this

section shall be reduced, as necessary, to provide for the following speci?c
procurement requirements for non-governmental customers at a single location or
facility, regardless of the number of meters at that location or facility, with
consumption exceeding ten million kilowatt-hours per year. On and after January
1, 2020, the kilowatt-hours of renewable energy procured for these customers shall
be limited so that the additional cost of the renewable portfolio standard to each
customer does not exceed the lower of one percent of that customer's annual
electric charges or ?fty thousand dollars This procurement limit criteria
shall increase by the lower of one-tenth percent or three thousand dollars
($3,000) per year until January 1, 2030, when the procurement limit criteria shall
remain ?xed at the lower of one percent of that customer's annual electric charges
or eighty thousand dollars After January 1, 203 0, the Council may adjust
the eighty thousand-dollar ($80,000) limit for in?ation. Nothing contained in this
paragraph shall be construed as affecting the utility's right to recover all reasonable
costs of complying with the renewable portfolio standard, pursuant to Resolution
The Council may authorize deferred recovery of the costs of complying
with the renewable portfolio standard, including carrying charges;

. Any customer within the Council?s jurisdiction, with consumption exceeding ten

million kilowatt-hours per year at any single location or facility, and that owns
renewable energy generation is exempt from all charges by the utility for renewable
energy procurements in a year, regardless of the number of customer locations or
meters on the system, if that customer certi?es to the Council?s auditor and noti?es
the Council and its serving electric utility that it will expend one and one-half
percent of that year's annual electricity charges to continue to develop within
twenty-four months customer-owned renewable energy generation. That customer
shall also certify that it will retire all renewable energy certi?cates associated with
the energy produced from that expenditure;

The renewable portfolio shall be diversi?ed as to the type of renewable energy
resource, taking into consideration the overall reliability, availability, dispatch
?exibility and cost of the various renewable energy resources made available by
suppliers and generators;

Renewable energy resources that are in the utility's electric energy supply portfolio
on July 1, 2020 shall be counted in determining compliance with the RPS targets
speci?ed in this section.

b) Eligible Resources



. Eligible resources consist of renewable energy and certain other technologies under

a two-tier structure to recognize local and non-local resources in achieving RPS
compliance

2.

Draft Standard Alternatives for the Purposes of Public Comment

?Tier 1? resources encompass local resources sited within the City of New Orleans
including renewable energy resources, distributed generation systems no more than
5 MW g. net metering and community solar), demand-side management/ energy
ef?ciency, and Bene?cial Electri?cation of commercial/industrial equipment.

?Tier 2? resources encompass any renewable resource located outside of New
Orleans including solar (electric or thermal), wind, biomass, hydroelectric (all),
land?ll gas, waste-water treatment gas, geothermal, and fuel cells.

The utility shall seek Council approval of a methodology of calculating a REC
equivalent for demand?side management resources initiated after January 1, 2020
and for electri?cation of commercial/industrial equipment that would result in
reduced carbon intensity.

0) Eligible Resource Multipliers

1.

In meeting the total RPS portfolio percentage requirements, the utility shall design
its RPS procurement plans with the following credit multipliers on Tier 1 and Tier
2 eligible resources to identify preference for local resources.

Tier 1 eligible resources shall have a credit multiplier of 1.5 toward the RPS
requirement.

Tier 2 eligible resources shall have a credit multiplier of 1.0 toward the RPS
requirement.

d) RECs and Certi?cation Requirements

1.

The utility can satisfy the RPS portfolio percentage requirements through a
combination of Tier 1 and Tier 2 resources and the use of renewable energy
certi?cates (RECs). A REC represents all of the environmental attributes from 1
of electricity generated from a renewable energy resource. To the extent that
the utility cannot meet the RPS requirement through Tier 1 and Tier 2 resources,
the utility can satisfy the RPS requirements through the use of RECs.

The Council-approved methodology will be used to calculate demand-side
management REC equivalents and other eligible resource REC equivalents as a
credit toward RPS compliance.

RECs shall be certi?ed by the Center for Resource Solutions' Green-e?
certi?cation program (Green-e). The acquisition, sale or transfer, and retirement of
any renewable energy certi?cates used to meet renewable portfolio standards on or
after January 1, 2021 must be registered with M-RETS or other equivalent REC
regional tracking system to provide data necessary to substantiate and support
veri?cation and tracking of renewable energy generation.

RECS that are not used for compliance, sold, or otherwise transferred may be
carried forward for up to 2 years.

SECTION 4: ENFORCEMENT

a) RPS Compliance Filings



1.

Draft Standard Alternatives for the Purposes of Public Comment

By April 1, 2021 and April 1 of each year thereafter until 2040, and thereafter as
determined necessary by the Council, the utility shall ?le a report to the Council on
its procurement and generation of renewable energy and eligible resources during
the prior calendar year and a procurement plan that includes:

i. the cost of procurement for any new renewable energy or eligible resource
in the next calendar year required to comply with the renewable portfolio
standard, describing the procurement and generation of renewable energy;

ii. the incremental cost of DSM and other eligible resource above the cost
for that program/resource approved by the Council notwithstanding the
RPS.

Compliance estimates identi?ed by technology type and credit multiplier,
and documented including the use of renewable energy certi?cates; and

iv. a suggested procurement plan for the following year; and

V. testimony and exhibits that demonstrate that the proposed procurement
plan is the least cost plan in meeting the Council?s RPS requirements, and
reasonable as to its terms and conditions considering price, availability,
dispatchability, any renewable energy certi?cate values and diversity of
the renewable energy resource; or

vi. a demonstration that the proposed procurement plan is otherwise in the
public interest.

2. The Council will approve or modify the utility's procurement plan within ninety

days and may approve the plan without a hearing, unless a protest is ?led that
demonstrates to the Council's reasonable satisfaction that a hearing is necessary.
The Council may modify a plan after notice and hearing. The Council may, for
good cause, extend the time to approve a procurement plan for an additional ninety
days. If the Council does not act within the ninety-day period, the procurement
plan is deemed approved.

The Council may reject a procurement plan if it ?nds that the plan does not contain
the required information and, upon the rejection, may suspend the public utility's
obligation to procure additional resources for the time necessary to ?le a revised
plan; provided that the total amount of renewable energy to be procured by the
public utility shall not change.

Renewable energy procurement plans and RPS reports that the utility ?les with the
Council are also required to be made available on the utility?s website.

b) Enforcement

l13104Bl3\V~6

1.

If the utility fails to meet the annual RPS requirements, it shall include with its
annual compliance report a notice of noncompliance. The notice of noncompliance
shall provide the following information:

Draft Standard Alternatives for the Purposes of Public Comment

i. A computation of the difference between the eligible resources/RECS
required and the amount actually obtained;

ii. A detailed plan describing how the utility intends to meet the shortfall
from the previous calendar year, pursuant to Section 3 herein; and

A detailed estimate of the costs of meeting the shortfall.

2. If the Council ?nds that the utility has failed to comply with its implementation

plan without reasonable cause, the Council may ?nd that the utility shall not recover
the costs of meeting the shortfall in rates. Depending on the number and frequency
of notices of noncompliance, the Council may also determine and apply additional
penalty measures.

SECTION 5: COST RECOVERY AND BILL IMPACT LIMITATION
a) Establishment of an RPS Cost Cap

1.

As a mechanism to provide ratepayer protection from unreasonable rate increases,
the Council hereby establishes an RPS compliance cost cap above which level the
utility shall not be required to add renewable energy to its electric energy resource
portfolio pursuant to the renewable portfolio standard. The cost cap in any RPS
plan year is one percent of plan year total utility retail sales revenues,
beginning in 2021.

If the utility can support its ?nding that, in any given year, the cost of compliance
with the renewable portfolio standard is projected to be greater than the cost cap as
established by the Council?s RPS, the utility shall not be required to incur costs in
excess of the cost cap; provided that the existence of this condition excusing
performance in any given year shall not operate to delay the annual increases in the
renewable portfolio standard in subsequent years. When the utility can generate or
procure renewable energy and eligible resources at or below the cost cap, it shall
be required to add such resources to meet the renewable portfolio standard
applicable in the year when the renewable energy resources are being added.

The utility may either request a waiver from its RPS requirements and/or request
modi?cations to speci?c requirements, if it believes that compliance will be in
excess of the rate impact cost cap.

If the utility desires to procure eligible resources beyond the RPS compliance cost
cap, the Council will determine if it is in the public interest to encourage the utility
to acquire renewable energy supplies in amounts that exceed the requirements of
the renewable portfolio standard.

b) Estimating RPS Compliance Costs Relative to the Cost Cap



1.

Consistent with best practices, to estimate incremental RPS compliance costs, the
gross RPS compliance costs are compared to the costs to procure resources absent
RPS procurement (?the counterfactual scenario? or avoided costs).

Speci?cally, the gross cost of eligible resources to achieve RPS compliance are
compared to avoided costs de?ned as the wholesale capacity and energy (MISO)
market prices shaped to match the output of the renewable energy.

7

113l04813\V-6

Draft Standard Alternatives for the Purposes of Public Comment

The calculations comparing estimated compliance costs can be made over a longer
time period and evaluated on an annual basis.

Cost mitigation measures adjusting the RPS compliance requirement and
compliance costs;

i.

ii.

First, provisions in current RPS limit the potential cost of complying with
the RPS. In any given year, if the cost to procure renewable energy and
eligible resources is greater than the cost cap, the utility may reduce its
procurement down to the cost cap percentage level. However, the
condition excusing performance under the RPS in any given year may not
serve as an excuse to delay procurement of suf?cient resources to meet
the increasing RPS compliance requirements in ?iture years. The cost cap
in any plan year is 1% of retail sales.

Second, the large customer cap also constrains the amount of renewable
energy that can be procured. For non?governmental customers who
consume more than 10 million kilowatt-hours (kWh) per year, renewable
energy procurement is limited by 2030 so as not to exceed either 1% of
the customer?s annual electric charges or $80,000 by 2030, whichever is
less.

Dra?? Standard Alternatives for the Purposes of Public Comment

ALTERNATIVE 2: Renewable and Clean Portfolio Standard 

SECTION 1: OVERVIEW
It is the intent of the Renewable and Clean Portfolio Standard to:

a) Aggressively pursue reductions to carbon emissions to improve the health and quality of
life of the citizens of New Orleans and to reduce the City?s impact on climate change,
which is an existential threat to the City?s security.

b) Ensure that the City has a safe and reliable power supply at a reasonable cost and retain as
much ?exibility as possible to employ a wide range of currently known and yet to be
developed zero-emissions energy technologies.

SECTION 2: DEFINITIONS

?Beneficial Electrification? means any program or process that replaces direct fossil fuel
use as a source of power and heat with electricity in a way tha -- when the electric utility?s
emissions are accounted for -- reduces overall emissions, including, but not limited to,
charging infrastructure supporting electri?cation of motor vehicles, electri?cation of home
and commercial appliances that use natural gas, and electri?cation of municipal and
commercial operations that currently rely on fossil-fuel use to power equipment.

?Carbon Sequestration? means the ?xation of atmospheric carbon dioxide in a carbon
sink through biological or physical processes. A carbon sink is a reservoir that absorbs or
takes up released carbon from another part of the carbon cycle.

means carbon capture, utilization and sequestration.

?Council? refers to the Council of the City of New Orleans.

?Community Solar Generation Facility? or Facility? means a solar energy
facility that meets the de?nition of a Community Solar Generation Facility under the
Council?s Community Solar Rules.

?Community Solar Program? means a program that encompasses the facilities, entities,
functions and requirements implemented by the Council?s Community Solar Rules.

?Community Solar Rules? means the Community Solar Rules for the Council of the City
of New Orleans adopted by Council Resolution No. R-19-111 (and as modi?ed by any
subsequent Council action).

?Conservation Program? means a program in which a utility company furnishes home
weatherization services free or at reduced cost or provides free or low cost devices for
saving energy, such as energy ef?cient light bulbs, ?ow restrictors, weather stripping, and
water heater insulation.



Draft Standard Alternatives for the Purposes of Public Comment

?Cost of Compliance? the cost of compliance with the RPS shall be the incremental costs
incurred by ENO over and above the costs to serve its load that are attributable solely to
the compliance with the RPS policy.

?Customer? means a retail electric customer account holder of the Utility.
means the Council Utilities Regulatory Of?ce.

?Demand-Side Management? or means a utility action that reduces or curtails
end-use equipment or processes, often used to reduce customer load during peak demand
and/or in times of supply constraint.

?Distributed Energy Resource? or means a generator that is located close to the
particular load it is intended to serve, and is operated primarily to serve that load.

?Distribution System? the portion of the transmission and facilities of an electric system
that is dedicated to delivering electric energy to an end-user.

?Energy Ef?ciency Programs? means programs that are aimed at reducing the energy
used by speci?c end-use devices and systems, typically without affecting the services
provided. Examples include high-ef?ciency appliances, ef?cient lighting programs, high-
ef?ciency heating, ventilating and air conditioning (HVAC) systems or control
modi?cations, ef?cient building design, advanced electric motor drives, and heat recovery
systems.

?Green-e? means the formal certi?cation of RECs provided by the Center for Resource
Solutions' Green-e? certi?cation program, distinct from the tracking of RECS. ?Low-
Income Customer? means a Customer whose gross annual household income is at or
below 50 percent of Area Median Income for the relevant period or who is certi?ed as
eligible for any federal, state, or local assistance program that limits participation to
households whose income is at or below 50 percent of Area Median Income.

means the Midwest Renewable Energy Tracking System, a web-based system
used by power generators, utilities, marketers, and quali?ed reporting entities. M-RETS
registers projects in all states and provinces across North America. M-Rets tracks
Renewable Energy Certi?cates and facilitates REC transactions by issuing a
unique, traceable digital certi?cate for every megawatt-hour of renewable energy
generated by registered units or imported into its system.

?Microgrid? means a group of interconnected loads and distributed energy resources
within clearly de?ned electrical boundaries that acts as a single controllable entity with
respect to the grid. A microgrid can connect and disconnect from the grid to enable it to
operate in both grid-connected or island mode.

means the Midcontinent Independent System Operator, Inc.

10

ll3l04813\V-6

Draft Standard Alternatives for the Purposes of Public Comment

?MISO-Connected Renewable Energy Resource? means a renewable energy resource
that is ?rst put into service on or after January 1, 2020 and is interconnected to
transmission-level voltage within the Midwest Independent System Operator?s footprint.

Rules? means the New Orleans Net Energy Metering Rules adopted by Council
Resolution No. (and as modi?ed by any subsequent Council action).

means the Renewable and Clean Portfolio Standard.

?Renewable Energy Credit? or means a contractual right to the full set of non?
energy attributes, including any and all credits, bene?ts, emissions reductions, offsets, and
allowances, howsoever entitled, directly attributable to a speci?c amount of electric energy
generated from a renewable energy resource. One REC results from one of electric
energy generated from a renewable energy resource. To qualify for compliance purposes,
RECS must meet the following conditions: (1) they were generated from a Renewable
Energy Resource in MISO or that is deliverable into the MISO region; (2) they are Green-
certi?ed and tracked with MRETS or an equivalent; (3) they are retired against the
compliance requirements in the compliance year in which they were created.

?Renewable Energy Resource? means a facility that generates electricity using solar
thermal, photovoltaic, wind, geothermal, ?lel cell using renewable fuels, hydroelectric
generation, ocean wave, ocean thermal, or tidal current, and any additions or enhancements
to the facility using that technology. For a Renewable Energy Resource to qualify for
compliance purposes, any RECS associated with that resource in the compliance year must
be retired.

?Retail Compliance Load? means the total jurisdictional retail sales, measured in kWh,
for an electric utility during an annual period.

?Tier 1 Resource? means any resource or measure that reduces carbon emissions from
existing sources within Orleans Parish, including, but not limited to, new/additional CCUS
on existing fossil-?red generation resources, Bene?cial Electri?cation, and EV charging
stations.

?Tier 2 Resource? means any renewable or zero-emissions distributed generation resource
in Orleans Parish, as well as any utility DSM Program or utility Conservation Program,
including the Energy Smart Program and any successor thereto.

?Tier 3 Resource? means any Renewable Energy Resource or zero-emissions resource
not in Orleans Parish, but that is in MISO or that is deliverable into the MISO region.

?Utility? refers to any utility providing electric service to customers in the City of New
Orleans and regulated by the Council.

?Zero-Emissions Resource? means any form of generation that generates electricity
without producing carbon emissions, including, but not limited to, Renewable Energy

11

1131048l3\V-6

Dra? Standard Alternatives for the Purposes of Public Comment

Resources, nuclear, and fossil?fueled generators where 100% of carbon emissions are
captured through CCUS.

SECTION 3: RENEWABLE AND CLEAN PORTFOLIO STANDARD

a) The Utility must meet the speci?ed RCPS percentages of retail sales with a
combination of Tier 1, 2 and 3 resources as follows:

1. 2021: 62% of retail compliance sales, with not more than 25% compliance

through RECs.

2. 2022: 64% of retail compliance sales, with not more than 25% compliance
through RECs.

3. 2023: 66% of retail compliance sales, with not more than 25% compliance
through RECs.

4. 2024: 68% of retail compliance sales, with not more than 25% compliance
through RECs.

5. 2025: 70% of retail compliance sales, with not more than 25% compliance
through RECs.

6. 2026: 72% of retail compliance sales, with not more than 25% compliance
through RECs.

7. 2027: 74% of retail compliance sales, with not more than 25% compliance
through RECs.

8. 2028: 76% of retail compliance sales, with not more than 25% compliance
through RECS .

9. 2029: 78% of retail compliance sales, with not more than 25% compliance
through RECs.

10. 2030: 80% of retail compliance sales, with not more than 20% compliance
through RECs.

11. 2031: 82% of retail compliance sales, with not more than 20% compliance
through RECs.

12. 2032: 84% of retail compliance sales, with not more than 20% compliance
through RECs.

13. 2033: 86% of retail compliance sales, with not more than 20% compliance
through RECS.

14. 2034: 88% of retail compliance sales, with not more than 20% compliance
through RECs.

15. 2035 90% of retail compliance sales, with not more than 20% compliance
through RECs.

16. 2036: 92% of retail compliance sales, with not more than 20% compliance
through RECs.

12

113l048l3\V-6

Draft Standard Alternatives for the Purposes of Public Comment

17. 2037: 94% of retail compliance sales, with not more than 20% compliance

through RECS.

18. 2038: 96% of retail compliance sales, with not more than 20% compliance
through RECS.

19. 2039: 98% of retail compliance sales, with not more than 20% compliance
through RECS.

20. 2040: 100% of retail compliance sales, with not more than 20% compliance
through RECS.

21. 2041: 100% of retail compliance sales, with not more than 18% compliance
through RECS.

22. 2042: 100% of retail compliance sales, with not more than 16% compliance
through RECS.

23. 2043: 100% of retail compliance sales, with not more than 14% compliance
through RECS.

24. 2044: 100% of retail compliance sales, with not more than 12% compliance
through RECS.

25. 2045: 100% of retail compliance sales, with not more than 10% compliance
through RECS.

26. 2046: 100% of retail compliance sales, with not more than 8% compliance
through RECS.

27. 2047: 100% of retail compliance sales, with not more than 6% compliance
through RECS.

28. 2048: 100% of retail compliance sales, with not more than 4% compliance
through RECS.

29. 2049: 100% of retail compliance sales, with not more than 2% compliance
through RECS.

30. 2050: 100% of retail compliance sales; with 0% compliance through RECs .

b) RCPS Credit Multipliers: For years 2021 through 2040, Tier 1 resources shall be credited
at a factor of 1.5 and Tier 2 at 1.25 for compliance purposes.

c) Bene?cial Electri?cation - The Utility may count the known and measurable increase in
retail electric sales that is directly attributable to bene?cial electri?cation of
conversion of the use of Sewerage Water Board fossil-fuel generators to electric service
provided by the Utility or from electric vehicle charging stations as a decrement to
minimum compliance load in the years 2021 through 2033.

d) To design an effective CES policy and help mitigate unintended consequences, the Council
needs consider several key assumptions and considerations such as technology, system
operation and physical constraints. Incorporating clean energy standards into IRP
process as a portfolio strategy re?ecting the Council?s policies, is an important evaluation
forum that considers market, economic, technical, and resource potential. Such a modi?ed

13



Draft Standard Alternatives for the Purposes of Public Comment

IRP process also ensures long-term planning decisions are consistent with achieving the
lowest reasonable costs for customers

SECTION 4: ENFORCEMENT

The Utility?s progress toward the RPS goal shall be monitored and enforced as follows:

a) By April 1 of each calendar year, the Utility shall ?le a report with the Council regarding
its achievement of the RPS goal for the prior calendar year and its plan for achieving the
goal in the current calendar year. The report should include clear and concise information

that:

1.

ll] l04813\V?6

Either demonstrates that the Utility has complied with the applicable standard
under Section 3, including the submission of any RECs utilized; or
demonstrates the amount of sales by which the Utility fails to meet the
applicable standard under Section 3.

An energy portfolio report for the preceding calendar year which shall identify the
hours produced by each supply and demand-side resource comprising the
utility?s resource portfolio. RECs purchased and utilized by the utility and their
associated as well as MWH associated with net metering, DSM and other
eligible resources, should also be included in the energy portfolio report. For each
resource in the portfolio, the utility shall identify the resource name, fuel
type, the average per energy related cost associated with that resource, and
the average per energy-related revenue received from MISO for that
resource. The energy portfolio report should include a calculation of the
incremental cost (if any) of compliance with the RCPS over and above costs ENO
would have otherwise incurred to serve its load in the preceding calendar year.

In the event that the Utility fails to comply with the RCPS standard for the
applicable calendar year, the Utility shall make an Alternative Compliance
Payment into a Fund established by the Council for the
purposes of fostering efforts to reduce carbon emissions within Orleans Parish. The
Alternative Compliance Payment shall be structured as $/kWh of shortfall and shall
be based on the relative cost of eligible resources and RECs in Tier 3

Recognizing that energy resources are not always perfectly sized to match load in
any specific year and notwithstanding the ACP in Section 4.a)3 above, the Utility
may propose and the Council may approve a plan to satisfy compliance for a block
of compliance years upon demonstration that such plan is prudent, just and
reasonable. The completion of such plan, as approved by the Council, shall be
deemed compliance with the RCPS for the full block of compliance years so long
as the target for the end of the block of compliance years is met and the RCPS
compliance cost cap/ bill impact limitation for the total block of compliance years
is not exceeded (except as may be approved by the Council for good cause),
notwithstanding that the target for any specific compliance year within the block of
compliance years may be over or under achieved and that the cost cap/bill impact
limitation may be exceeded for a given year.

14

Dra? Standard Alternatives for the Purposes of Public Comment

SECTION 5: COST RECOVERY AND BILL IMPACT LIMITATION

a) The Utility shall be allowed cost recovery for RCPS compliance as follows:

1. The Utility shall be allowed the opportunity to recover prudently incurred costs in
complying with a mandated renewable and clean portfolio standard.

2. The Utility shall be allowed to recover the Alternative Compliance Payment if:

i. The payment of the Alternative Compliance Fee is the least-cost measure to
customers as compared to the cost of Tier 1, 2 or 3 resources, including
RECs, to comply with the or

ii. There are fewer Tier 1, 2 or 3 resources available than are required to
comply with the RCPS, as supported by the utility and con?rmed by the
Council?s Advisors.

b) As a mechanism to provide ratepayer protection from unreasonable rate increases, the
Council hereby establishes an RPS compliance cost cap above which level the utility shall
not be required to add renewable energy to its electric energy resource portfolio pursuant
to the renewable portfolio standard. The cost cap in any RPS plan year is one percent 
of plan year total utility retail sales revenues, beginning in 2021.

1. If the utility can support its ?nding that, in any given year, the cost of compliance
with the renewable portfolio standard is projected to be greater than the cost cap as
established by the Council?s RPS, the utility shall not be required to incur costs in
excess of the cost cap; provided that the existence of this condition excusing
performance in any given year shall not operate to delay the annual increases in the
renewable portfolio standard in subsequent years. When the utility can generate or
procure renewable energy and eligible resources at or below the cost cap, it shall
be required to add such resources to meet the renewable portfolio standard
applicable in the year when the renewable energy resources are being added.

2. The utility may either request a waiver from its RPS requirements and/or request
modifications to speci?c requirements, if it believes that compliance will be in
excess of the rate impact cost cap.

3. The Utility may petition the Council for authorization to exceed the bill impact/
cost cap for good cause shown. To the extent that the Council is satis?ed that good
cause exists to allow the Utility to exceed the cap in a speci?c year, and that such
costs are reasonable and prudent, it may, at its discretion, authorize the Utility to
exceed the rate impact cap.

SECTION 6: CLEANNOLA FUND

The Council shall establish a Fund (?Fund?) or the purposes of fostering the reduction
of carbon emissions in Orleans Parish. The Fund shall prioritize projects designed to reduce carbon
emissions from existing sources of such emissions in Orleans Parish. The Fund shall not at any
time be transferred to, or lapse into, or be comingled with the General Fund of the City of New
Orleans and it shall be administered by

15

ll31048l3\V-6

Draft Standard Alternatives for the Purposes of Public Comment

ALTERNATIVE 3: Resilient and Renewable Portfolio Standard 

SECTION 1: OVERVIEW
It is the intent of the Resilient and Renewable Portfolio Standard to:

a)
b)

C)

d)

Strengthen New Orleans through a focus on energy resilience and local energy resources;

Ensure that the bene?ts of renewable energy are equitable, accessible, and affordable for
all residents;

Provide new economic opportunities to communities by expanding and diversifying the
energy workforce and enabling programs that reduce energy cost burdens on low-income
residents; and

Attract and retain companies and industries that value ready access to renewable energy
resources.

SECTION 2: DEFINITIONS

?Bene?cial Electrification? means any program or process that replaces direct fossil fuel
use as a source of power and heat with electricity in a way that -- when the electric utility?s
emissions are accounted for -- reduces overall emissions, including, but not limited to,
charging infrastructure supporting electri?cation of motor vehicles, electri?cation of home
and commercial appliances that use natural gas, and electri?cation of municipal and
commercial operations that currently rely on fossil-fuel use to power equipment.

?Council? refers to the Council of the City of New Orleans

?Community Solar Generation Facility? or Facility? means a solar energy
facility that meets the de?nition of a Community Solar Generation Facility under the
Council?s Community Solar Rules.

?Community Solar Program? means a program that encompasses the facilities, entities,
functions and requirements implemented by the Council?s Community Solar Rules.

?Community Solar Rules? means the Community Solar Rules for the Council of the City
of New Orleans adopted by Council Resolution No. R-l9-111 (and as modi?ed by any
subsequent Council action).

?Conservation Program? means a program in which a utility company furnishes home
weatherization services free or at reduced cost or provides free or low cost devices for
saving energy, such as energy ef?cient light bulbs, ?ow restrictors, weather stripping, and
water heater insulation.

?Cost of Compliance? the cost of compliance with the RPS shall be the incremental costs
incurred by ENO over and above the costs to serve its load that are attributable solely to
the compliance with the RPS policy.

16

I13 

Draft Standard Alternatives for the Purposes of Public Comment

?Customer? means a retail electric customer account holder of the Utility.
means the Council Utilities Regulatory Of?ce.

?Demand-Side Management? or means a utility action that reduces or curtails
end-use equipment or processes, often used to reduce customer load during peak demand
and/or in times of supply constraint.

?Distributed Energy Resource? or means a generator that is located close to the
particular load it is intended to serve, and is operated primarily to serve that load.

?Distribution System? the portion of the transmission and facilities of an electric system
that is dedicated to delivering electric energy to an end-user.

?Energy Ef?ciency Programs? means programs that are aimed at reducing the energy
used by speci?c end-use devices and systems, typically without affecting the services
provided. Examples include high-ef?ciency appliances, ef?cient lighting programs, high-
ef?ciency heating, ventilating and air conditioning (HVAC) systems or control
modi?cations, ef?cient building design, advanced electric motor drives, and heat recovery
systems.

?Green-e? means the formal certi?cation of RECs provided by the Center for Resource
Solutions? Green-e? certi?cation program, distinct from the tracking of RECS.

?Low-Income Customer? means a Customer whose gross annual household income is at
or below 50 percent of Area Median Income for the relevant period or who is certi?ed as
eligible for any federal, state, or local assistance program that limits participation to
households whose income is at or below 50 percent of Area Median Income.

means the Midwest Renewable Energy Tracking System, a web-based system
used by power generators, utilities, marketers, and quali?ed reporting entities. M-RETS
registers projects in all states and provinces across North America. M?Rets tracks
Renewable Energy Certi?cates and facilitates REC transactions by issuing a
unique, traceable digital certi?cate for every megawatt-hour of renewable energy
generated by registered units or imported into its system.

?Microgrid? means a group of interconnected loads and distributed energy resources
within clearly de?ned electrical boundaries that acts as a single controllable entity with
respect to the grid. A microgrid can connect and disconnect from the grid to enable it to
operate in both grid-connected or island mode.

means the Midcontinent Independent System Operator, Inc.

?MISO-Connected Renewable Energy Resource? means a renewable energy resource
that is ?rst put into service on or after January 1, 2020 and is interconnected to
transmission-level voltage within the Midwest Independent System Operator?s footprint.

l7



Dra? Standard Alternatives for the Purposes of Public Comment

Rules? means the New Orleans Net Energy Metering Rules adopted by Council
Resolution No. R-07-132 (and as modi?ed by any subsequent Council action).

means the Resilient and Renewable Portfolio Standard.

?Renewable Energy Credit? or means a contractual right to the full set of non-
energy attributes, including any and all credits, bene?ts, emissions reductions, offsets, and
allowances, howsoever entitled, directly attributable to a speci?c amount of electric energy
generated from a renewable energy resource. One REC results from one of electric
energy generated from a renewable energy resource.

?Renewable Energy Resource? means a facility that generates electricity using biomass,
solar thermal, photovoltaic, wind, geothermal, fuel cell using renewable fuels,
hydroelectric generation, digester gas, land?ll gas, ocean wave, ocean thermal, or tidal
current, and any additions or enhancements to the facility using that technology. For a
Renewable Energy Resource to qualify for compliance purposes, any RECS associated with
that resource in the compliance year must be retired

?Resilient Energy Resource? means a renewable energy resource and any enhancement
or addition to that facility, including, but not limited to, energy storage devices, automation
controls, and advance inverters, which allow the renewable energy resource to operate in
island-mode during electrical outages to provide emergency power to onsite facilities or
facilities on a microgrid, and to operate in parallel with the electric utility?s grid under
normal conditions to supply some combination of electric power, frequency regulation, or
other ancillary services to the electric utility?s grid according to the dispatch orders or
de?ned operational conditions of the grid operator.

?Retail Compliance Load? means the total jurisdictional retail sales, measured in kWh,
for an electric utility during an annual period.

?Tier 1 Resource? means any separately-metered resilient energy resource located within
Orleans Parish, either on the retail customer?s side of the electric meter and participating
in a Council-approved program, (ii) or utility grid?connected, and operating as part of
a dispatchable microgrid system. RECS created from a Tier 1 resource must be registered
with M-RETS or equivalent and retired against the compliance requirements in the
compliance year in which they were created

?Tier 2 Resource? means any renewable distributed generation resource located in
Orleans Parish that does not qualify as a Tier 1 resource, as well as any utility DSM
Program or utility-managed Conservation Program, including the Energy Smart Program
and any successor thereto. Tier 2 resources also include net energy metering, community
solar, and non-Tier 1 resource customer programs that directly bene?t low-income
customers. The utility will seek Council approval of REC equivalents of Tier 2 resources.
RECS created from a Tier 2 resource just be registered with M-RETS or equivalent, used

18



Draft Standard Alternatives for the Purposes of Public Comment

only for the purpose of R-RPS compliance, and retired against the compliance requirements
in the compliance year in which they were created.

?Tier 3 Resource? means any renewable energy resource not located in Orleans Parish
that is located in MISO or deliverable into the M180 region, and ?rst put into service on
or after January 1, 2020. RECs can be procured as a Tier 3 resource under the following
conditions: (1) they were generated from a renewable energy resource that is deliverable
into the M180 region; (2) they are Green-e certi?ed and registered with M-RETS or
equivalent tracking system; (3) they are retired against the R-RPS compliance
requirements in the compliance year in which they were created.

?Utility? refers to any utility providing electric service to customers in the City of New
Orleans and regulated by the Council.

SECTION 3: RENEWABLE AND RESILIENT ENERGY PORTFOLIO STANDARD

a) The Utility must meet the speci?ed percentages of retail sales with a combination of
Tier 1, 2 and 3 resources, including credit multipliers of 1.5 for Tier 1 resources, 1.25 for
Tier 2 resources, and 1.0 for Tier 3 resources, as follows:

1. 2023: 20% of retail sales
2. 2025: 25% of retail sales
3. 2029: 40% of retail sales
4. 2033: 55% of retail sales
5. 2040: 100% of retail sales;

b) Bene?cial Electri?cation - The Utility may count the known and measurable increase in
retail electric sales that is directly attributable to bene?cial electri?cation of
conversion of the use of Sewerage Water Board fossil-fuel generators to electric service
provided by the Utility or from electric vehicle charging stations as a decrement to
minimum compliance load in the years 2021 through 2033.

SECTION 4: ENFORCEMENT
The Utility?s progress toward the R-RPS goal shall be monitored and enforced as follows:

b) By April 1 of each calendar year, the Utility shall ?le a report with the Council regarding
its achievement of the RPS goal for the prior calendar year and its plan for achieving the
goal in the current calendar year. The report should include clear and concise information
that:

1. Either demonstrates that the Utility has complied with the applicable standard
under Section 3, including compliance by resource Tiers and the submission of any
RECs utilized; or demonstrates the amount of sales by which the Utility
fails to meet the applicable standard under Section 3.

19



Draft Standard Alternatives for the Purposes of Public Comment

2. An energy portfolio report for the preceding calendar year which shall identify the

hours produced by each supply and demand-side resource comprising the
utility?s resource portfolio. RECs purchased and utilized by the utility and their
associated as well as MWH associated with net metering, DSM and other
eligible resources, should also be included in the energy portfolio report. For each
resource in the portfolio, the utility shall identify the resource name, fuel
type, the average per energy related cost associated with that resource, and
the average per energy?related revenue received from MISO for that
resource. This energy portfolio report should include a calculation of the
incremental cost (if any) of compliance with the RPS over and above costs ENO
would have otherwise incurred to serve its load in the preceding calendar year.

In the event that the Utility fails to comply with the RPS standard for the applicable
calendar year, the Utility shall make an Alternative Compliance Payment into a
Public Purpose Fund established by the Council in accordance with Section 6 of
these Rules within Orleans Parish. The Alternative Compliance Payment shall be
based on the related cost of eligible resources and RECs in each resource Tier, and
calculated as S/kWh of shortfall.

Recognizing that energy resources are not always perfectly sized to match load in
any speci?c year and notwithstanding the ACP in Section 4.a)3 above, the Utility
may propose and the Council may approve a plan to satisfy compliance for a block
of compliance years upon demonstration that such plan is prudent, just and
reasonable. The completion of such plan, as approved by the Council, shall be
deemed compliance with the RCPS for the full block of compliance years so long
as the target for the end of the block of compliance years is met and the bill impact
limitation for the total block of compliance years is not exceeded (except as may
be approved by the Council for good cause), notwithstanding that the target for any
speci?c compliance year within the block of compliance years may be over or under
achieved and that the bill impact limitation may be exceeded for a given year.

SECTION 5: COST RECOVERY AND BILL IMPACT LIMITATION

c) The Utility shall be allowed cost recovery for RPS compliance as follows:

. The Utility shall be allowed the opportunity to recover prudently incurred costs in

complying with a mandated resilient and renewable energy portfolio standard.

2. The Utility shall be allowed to recover the Alternative Compliance Payment if:

i. The payment of the Alternative Compliance Fee is the least-cost measure to
customers as compared to the purchase of Tier 1, 2 or 3 resources to comply
with the or

ii. There are insuf?cient Tier 1, 2 or 3 resources to comply with the RPS as
supported by the utility and con?rmed by the Advisors.

d) The impact on total ratepayer bills shall be capped at one percent of total annual retail
sales revenue.



20

Draft Standard Alternatives for the Purposes of Public Comment

1. To the extent that the Utility demonstrates to the Council?s satisfaction that it is
unable to comply with the without exceeding the compliance cap, the Utility
shall be excused from compliance in the relevant year.

2. To the extent that the Alternative Compliance Payment would cause the Utility to
exceed the R-RPS compliance cap, the Alternative Compliance Payment shall be
reduced to an amount that does not cause the Utility to exceed the cap.

3. The Utility may petition the Council for authorization to exceed the bill impact cap
for good cause shown. To the extent that the Council is satis?ed that good cause
exists to allow the Utility to exceed the compliance cap in a speci?c year, and that
such costs are reasonable and prudent, it may, at its discretion, authorize the Utility
to exceed the rate impact cap.

SECTION 6: ESTABLISHMENT OF A PUBLIC PURPOSE FUND

By January 1. 2023, the Utility shall establish a Public Purpose Fund account for purposes of
allocating funding to programs speci?cally dedicated to bene?t low-income customers.
The fund will provide ?nancial supports or additional incentives to encourage participation of
qualifying low-income households in R-RPS Tier 1 and Tier 2 programs to ensure equitable
sharing of the bene?ts of those programs.

The account may be funded through various mechanisms including Alternative Compliance
Payments and a Public Purpose Charge, to be instituted by the Council, which may be funded
based on retail sales. The Council may set an appropriate budget for the charge.

The Council may also utilize revenues from the Public Purpose Charge to establish a ?Green Banks?
or other community-based ?nancial services entity to provide credit enhancements and other

?nancing assistance to enable low-income and credit-stressed households to have ownership of

Tier 1 and Tier 2 projects. The Public Purpose Charge shall not be counted as an incremental cost

of the R-RPS for purposes of determining compliance with retail cost caps. The Council may

exempt low-income households from the public purpose charge. The Council shall establish which

City of?ce shall manage the Fund.

21