A crew of linemen use bucket trucks to repair a utility pole and restore electricity near Houma on Sept. 12, 2024, one day after Hurricane Francine made landfall in Terrebonne Parish. (Wes Muller/Louisiana Illuminator)
Louisiana residents pay much higher electricity bills than the national average and live with one of the least reliable electric grids in the country, according to a new report from the Louisiana Legislative Auditor’s Office.
The report, titled “Louisiana’s Electric Profile,” details the findings of an in-depth analysis on the generation, consumption and regulation of electricity, including problems affecting the state’s electric grid. It found that, among other things, Louisiana is one of the least energy efficient states with one of the most unreliable electric grids in the nation.
The effects have fallen largely on Louisiana residents, who consume more electricity than almost any other state and pay higher-than-average electric bills.
Also, its power grid experiences the highest number and longest duration of power outages in the southern region — even after excluding service interruptions caused by severe weather, according to the report.
The scope of the analysis covers 2010-23, though some information extends through 2024.
The Louisiana Public Service Commission, which regulates the state’s electric grid and most of its utility companies, served as one of the primary sources of information for the audit. The report also included certain data from municipally-owned electric utilities that fall outside the LPSC’s jurisdiction.
While some of the information has been the subject of previous news reports, the document stands out as a comprehensive assessment of the various issues surrounding the state’s power grid without venturing into the highly technical aspects of the energy sector that is typical of discussions involving the LPSC.
“I know others will say the technical stuff is needed, but it doesn’t gloss over the fact we haven’t diversified” power sources to generate electricity in Louisiana, Public Service Commissioner Davante Lewis said.
The report highlights Louisiana’s heavy reliance on natural gas to generate electricity. The state’s generation portfolio, which covers all electric utilities in Louisiana, was approximately 72% natural gas, 20% nuclear and 5% coal as of 2023. The remaining 3% comes partly from petroleum and renewables.
Louisiana is one of only a few states with such a heavy reliance on natural gas power generation, which is susceptible to large-scale failures during extreme weather, according to the report.
Both the frequency and duration of power outages in Louisiana have increased significantly from 2013-23 even without “major event days” such as storm-related outages and public safety shutoffs. Excluding all major events, the frequency of outages in the state increased 14.3% and the average duration of those outages increased 50%.
The average duration of outages in Louisiana, including those during storms and other major events, jumped 76.4%, from 5.5 hours in 2013 to 9.7 hours in 2023, with the largest spike occurring from 2019 to 2020.
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The state’s outage frequency worsened from 1.4 to 1.6 on an index with a national average of 0.9, a figure that’s remained largely steady since 2013.
Asked about the report’s conclusions on grid reliability, Entergy Louisiana agreed severe weather affects reliability and costs but also mentioned Louisiana’s geography as a unique challenge.
“Louisiana is exposed to many natural risks that other states in the Southeast are not prone to,” spokesman Brandon Scardigli said. “Terrain in Louisiana, especially in south Louisiana, where our population centers are located, consistently challenges electric reliability with poles being set in marshes and infrastructure exposed to dense vegetation with multiple growing seasons. Louisiana also has frequent and intense lightning and severe thunderstorms. Simply put, Louisiana is not the same as the states that surround it, ecologically or geographically.”
Scardigli said the company’s reliability is among the best in the state and surpassed the LPSC’s targets for 2023, the most recent available. Also, Entergy recently invested $2 billion in grid hardening measures, which have already seen measurable success in recent storms such as Hurricane Francine, he said.
Utility companies and politicians have often said Louisiana has some of the lowest retail prices of electricity in the country. Public Service Commissioner Eric Skrmetta even mentioned it during his nationally-televised statement at the Republican National Convention last July.
However, those low prices have not equated to lower electric bills for Louisiana residents and businesses, which pay more on average than the rest of the nation, the auditor’s report states.
For residents, particularly, the average monthly electric bill was the 16th highest in the nation in 2023 at roughly $143 per month, according to the report. The average national monthly bill was $137, according to the U.S. Energy Information Administration.
It is not so much the electricity rates that are driving high power bills. Rather, as the report makes clear, it is the high consumption of electricity and inefficiency that Louisiana customers are paying for.
The industrial sector comprises less than 1% of the customer base for electricity but uses the largest share, 42%, of the power generated in the state. Even so, the industrial price of electricity in Louisiana is nearly the same as it was in 2013, the report shows.
When asked about this, Lewis said many of the state’s heavy industrial plants build or purchase their own on-site generators and connectors. This allows them to avoid some of the cost inefficiencies and reliability issues that affect the residential and commercial sectors, he said.
The report also notes Louisiana residents use the most electricity per capita in the nation. The state also ranks second behind Alaska for the highest rate of total energy consumption across all sectors, according to federal data.
“Best practices show that, although maintaining reasonable rates is a priority for all regulators, affordable energy costs cannot be addressed by low rates alone,” the report states.
In an email Thursday, Entergy agreed with some of the auditor’s conclusions regarding Louisiana’s climate and inefficiency issues as major cost drivers.
“Residential electricity costs are driven by Louisiana’s hot summers and older, less energy efficient homes,” Scardigli said.
Over the past three years, several of the state’s utility companies have taken steps to diversify their generation portfolios, particularly with renewable energy. Collectively, the utilities have provided a seven-fold increase in their solar generation from 2020 to 2023.
On average, utility-scale solar and onshore wind are the cheapest of all energy sources in the U.S., even without including subsidies. They have consistently been so for several years, according to annual studies from the financial firm Lazard.
SWEPCO has been importing wind-generated power from other states and has plans for a solar facility in Caddo Parish. Entergy Louisiana received LPSC approval last year to add 3 gigawatts of solar to its portfolio.
The auditors point to low grid reliability, climate, natural disasters and poverty as some of the factors behind energy inefficiency in Louisiana. They also point out that the LPSC has since taken steps to address the problem with a recent adoption of a statewide energy efficiency program that will take effect Jan. 1, 2026.
The report lists a number of things the state could do to improve its electricity profile such as building new transmission lines and decentralizing power generation with initiatives such as community solar gardens. It also highlights the various regulatory inefficiencies that have bogged down innovation.
The auditors recommend the LPSC improve its staff turnover rate, which was 19% last year, and try to fill the 17 staff vacancies it had last year. The audit also points out Louisiana law doesn’t require its public service commissioners to have any relevant educational or industry experience to qualify for election.
“As a result, newly-elected commissioners may face steep learning curves that make it more challenging for them to lead on timely regulatory issues,” the report states.
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