Business Cover

Here Comes the Sun As LUS backs off its controversial “solar tax,” stakeholders call for more transparency, and for a renewed engagement with the community-owned utility provider.

by Mike Stagg

Lafayette resident Simon Mahan can monitor the energy being created by his home's solar panels from his computer.
Photo by Robin May

The death of LUS’ so-called “solar tax” has opponents renewing calls for reforms at the municipally owned utility, and this time they may have traction.

On the eve of Election Day, LUS Director Terry Huval pulled the plug on LUS’ fixed asset fees affecting approximately 250 residential customers who have solar panels on their rooftops to generate electricity. Huval is asking the Lafayette Public Utilities Authority — the parish council entity that governs LUS — to repeal that segment of the ordinance imposing the fees.

On Election Day, Lafayette City-Parish Councilman Bruce Conque, chairman of the LPUA, wrote the other four LPUA members — council members Patrick Lewis, Nanette Cook, Kenneth Boudreaux and Liz Hebert — endorsing the repeal.

The solar tax was born at a bad time. According to a timeline provided by Conque, the fixed asset fees were included in a package of rate adjustments presented by LUS at the Aug. 11 LPUA meeting, the day before torrential rains leading to historic flooding in the parish began. Lafayette was reeling from the flood when the ordinance enacting the rate adjustments was introduced at the Aug. 16 meetings of the LPUA and the City- Parish Council. The rate changes were approved by both LPUA and the council on Sept. 6, and became official with the adoption of the LUS budget two days later.

Conque defends the transparency and openness of the process in an email to ABiz.

“The net metering charge was part of the overall utilities rate adjustment approved on Sept. 6, 2016 by the LPUA (5-0 vote) and the Lafayette City-Parish Council (7-1 vote, one abstention),” Conque writes. “The LPUA met at 4:30 p.m. and council at 5:30 p.m. It was an integral component of a very transparent process to adopt the 2016-2017 budgets for both LUS and Lafayette Consolidated Government.”

In a telephone interview prior to Huval’s decision to ask for a repeal of the fees, LUS Customer & Support Services Manager Andrew Duhon told ABiz they were meant to help LUS pay for infrastructure that solar users rely on for backup power.

“None of the solar customers on the LUS electric network are entirely power self-sufficient,” Duhon said. “They all need power from our system at some point.” He said because solar users don’t buy as much electricity from LUS as other customers, they do not fully cover the cost of LUS’ investments in wires, poles and other fixed assets needed to deliver power to them.

Huval and opponents of the plan agree that the charges would have raised very little money for LUS — only about $50,000 per year. Huval says that applications for state solar tax credits in Lafayette have dropped dramatically since the Legislature capped the program in 2015. He said there were 73 in 2015 and 15 this year.

Opponents of the plan, led by the Acadiana chapter of the Sierra Club and Lafayette-based alternative energy advocate Simon Mahan, dubbed it the “solar tax.”

Photo by Robin May

In a Nov. 1 post on his blog, Mahan declared that the LUS fees would punish rooftop solar investors in Lafayette. ABiz republished the post online on Nov. 2, igniting a small but intense local firestorm (Mahan’s post on ABiz’s website garnered more than 60,000 page views in a matter of days).

Huval confirms that he was taken aback by the fierceness of the pushback on the fees and by what he called the mischaracterization of the rate and fee changes for solar users.

“They called it a solar tax,” Huval says. “I have never passed a tax. I couldn’t pass a tax if I wanted to. It’s not in my power.”

Councilwoman Hebert tells ABiz in a phone interview that she received numerous calls from her constituents about the fixed asset fees.

Huval and Mahan spoke on Nov. 4, according to Mahan. “I got the distinct impression then that Terry was having second thoughts about the fees,” Mahan tells ABiz.

In a morning telephone interview three days later, Huval was not ready to comment on the issue, saying he would have a statement later that day. Indeed, shortly before 5 p.m., Huval called to say that he had decided to ask the LPUA and the council to repeal that portion of the September rate increase dealing with net metering and fixed cost fees for solar users.

For his part, Haywood Martin of the Sierra Club calls the fees “an honest mistake.” He adds, though, that it points to the lack of regular communications and feedback between the utility and its owners — LUS customers.

“They viewed this issue through too narrow a perspective,” Martin says. “This controversy provides an opportunity to form a better working relationship between the community and LUS.”

Martin says that the local Sierra Club will renew its push for LUS to convene annual user/owner meetings, similar to those held by electric cooperatives like SLEMCO. The idea, he explains, dates back to LUS’ controversial decision to renew its investment in the coal-fired plant it co-owns with CLECO.

“We all need to be engaged in the conversation about Lafayette’s electric future,” Martin notes.

Simon Mahan’s net meter, photographed on a cloudy day in early November, shows his solar panels generating more energy than his home was using on this particular day.
Photo by Robin May