Energy: Powerful forces

Powerful forces

Increasingly severe weather, growing demand for alternative fuel sources and an aging transmission grid mean changes are coming to the electricity market. BY DAVID JACOBS

FEW AMENITIES ARE more basic for doing business and just living life than electricity, and few pastimes are more frustrating than waiting for that bucket truck to make it to your neighborhood after the power goes out. But Baton Rouge may see major changes in the years to come regarding where our power comes from and how it gets to us.

CLIMATE CHANGE

The planet’s warming climate hangs over any discussion about energy, including the desire to diversify into low-carbon alternatives. More powerful storms will deliver more wear and tear on the power infrastructure, and hotter summers will boost demand for electricity.

GRID STRENGTH

Entergy recently warned south Louisiana users to expect their power to be out for at least a week after even a Category 1 hurricane. The utility says it’s continuing to harden the grid, but after a major storm there’s always talk about burying the lines, which would be costly. Whether we’re talking about protecting the grid ahead of time or repairing it after a storm, ratepayers generally foot the bill, though the 2021 federal infrastructure bill includes billions for power infrastructure that Louisiana should be able to tap.

FUEL SOURCES

Louisiana gets about three-fourths of its electricity from natural gas, which was fine when gas was cheap. But recent price spikes have called that reliance into question, and if history is any guide, prices will continue to fluctuate. Moving the state away from gas dependency and into a less carbon-intensive future will take years, though several large-scale solar projects are in the pipeline and major offshore wind developers are eying the Gulf of Mexico.

ENTERGY’S MONOPOLY

Entergy Louisiana serves more than a million customers in the Capital Region and beyond who don’t have other options. State regulators are looking into whether the current system should be tweaked to allow for more competition, in hopes of forcing the company to focus on its ratepayers rather than its shareholders. But Entergy and its supporters will fight for the status quo, which has generally produced relatively low rates compared to other states.

MORE PLAYERS?

Baton Rouge-based Bernhard Capital Partners is pursuing public infrastructure business, including electricity. While the firm’s efforts to get into power production and distribution in Louisiana have been rebuffed so far, new players such as BCP and its $2.6 billion equity fund could provide new sources of investment.