US: Louisiana PUC orders limited FIT

Share

Most FIT contracts worldwide last for terms of 20 years or longer. Spanish contracts, for example, are guaranteed for 25 years, with extensions at a reduced payment for even longer. FIT contracts for hydro generation in Ontario, on the other hand, are in place for 40 years.

Louisiana's extremely short contract term may make the proposal moot as it will be nearly impossible to finance projects for such short periods at the low tariffs offered.

Of particular interest is the approach used to define the tariff, avoided cost plus a premium to represent the environmental benefits, which are valued at USD$0.03 per kilowatt hour (kWh).

Another novel element is passing the costs on to ratepayers through the fuel adjustment clause, an approach normally used for increases in the cost of fossil fuels. In this case, the PUC's "standard offer tariff" is truly a standard offer as the tariff is undifferentiated by size, technology, or resource intensity.

At the end of the five-year period, the tariff reverts to avoided cost.

Below is summary of the FITs key elements:

  • Avoided cost, plus USD$0.03 per kWh
  • Limited by ceiling and floor prices
    1. Ceiling price: USD$0.12 per kWh
    2. Floor price: USD$0.06 per kWh
      • Contract term: five years

Program cap: 30 megawatts (MW) per utility

Cost recovery through fuel adjustment charge

Project size limit: five MW

Minimum project size: 25 kW

Utilities may avoid offering any standard offer contracts by building three renewable energy projects themselves. Each of the three projects can be no more than 300 kW. One of the three projects can be up to five MW in size.

Popular content

This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.

Share

Related content

Elsewhere on pv magazine...

Leave a Reply

Please be mindful of our community standards.

Your email address will not be published. Required fields are marked *

By submitting this form you agree to pv magazine using your data for the purposes of publishing your comment.

Your personal data will only be disclosed or otherwise transmitted to third parties for the purposes of spam filtering or if this is necessary for technical maintenance of the website. Any other transfer to third parties will not take place unless this is justified on the basis of applicable data protection regulations or if pv magazine is legally obliged to do so.

You may revoke this consent at any time with effect for the future, in which case your personal data will be deleted immediately. Otherwise, your data will be deleted if pv magazine has processed your request or the purpose of data storage is fulfilled.

Further information on data privacy can be found in our Data Protection Policy.