Probe opened into generator impact on Louisiana gas systems | Business | theadvocate.com

Oct 17, 2024

Joe Dempster, aboard the "Never Satisfied, left, and Jason Lireette, right, prepare to move a boat to a safer dock in Bayou Gauche ahead of Hurricane Francine Wednesday, Sept. 11, 2024. (Staff photo by David Grunfeld, The Times-Picayune | NOLA.com)

State regulators opened an investigation on Wednesday into the impact of natural gas-fed home generators on Louisiana utility systems after houses in Lafourche Parish suffered from low gas pressure during Hurricane Francine, stymying their backup power.

So-called "whole home generators" have gained increasing popularity in Louisiana for a power backup as hurricanes have slammed the state in recent years and knocked out electricity for days or even weeks.

But officials with the Louisiana Public Service Commission say they are worried that older and smaller gas systems may not be able to handle the burst of demand the increasing number of generators create when the power goes out. The issue is related to overloaded infrastructure, not the actual supply of gas, which is ample.

"I tell everybody, if you live in south Louisiana, you might not have a swimming pool, but you're going to have a gas generator," Commission Chairman Mike Francis said in a recent interview. "It's just a fact of life now."

Low pressure affected customers in pockets of northern Lafourche Parish and the city of Thibodaux when Francine made landfall in September, making their home generators inoperable, parish and commission officials said.

"Some of them, they couldn't keep them going because they didn't have enough gas," said Francis, who has pushed for the new inquiry and formally announced it Wednesday during a commission meeting in Buras.

Lafourche Parish President Archie Chaisson III said outages affected customers of South Coast Gas Co., based in Raceland, Atmos Gas and the city of Thibodaux municipal system, though not all were related to pressure problems.

He said he met a few weeks ago with officials with the two private utilities and Enterprise Products, the interstate gas transmission company that supplies the utilities, and they have mapped out a possible solution.

In his area, Chaisson explained, a mix of factors were at play.

Though the parish has permitted home generators since 2007, the gas companies weren't actively included in that process. Gas companies' independent estimates for generators in Lafourche were off, Chaisson said.

Since the meeting, the parish has shared its permit data with the gas utilities. The data show spikes of new generators after Hurricanes Gustav and Ike in 2008 and after Hurricane Ida in 2021.

In some cases, the problems last month weren't related to utility gas pressures or volumes, as was the case for Atmos customers, Chaisson said, but involved mismatched meters, regulators and other equipment on individual homes, including older ones not geared for the increased flow required by home generators.

Another problem is that upgrades of infrastructure are necessary to deliver greater amounts of gas, particularly to older neighborhoods, the parish president added.

Chaisson said this infrastructure is where the public service commission can help. He also said he plans to gear parish rules for new development to bring in gas companies early in the permitting process and prepare new neighborhood infrastructure for home generators.

"It's going to be a multi-stage sort of thing, but I think we have a pretty good path forward," he said.

Chairman Francis' directive to open the investigation is primarily an information-gathering effort that's likely to include help from the state Department of Energy and Natural Resources, which has oversight on gas pipelines, but the work could develop into a more formal process later.

Colby Cook, spokesman for the Public Service Commission, said Hurricane Francine is the first time that the commission has been made aware that natural gas-fed generators had "an impact on gas distribution systems." But the agency hadn't verified the reports either.

Brandon Frey, executive secretary of the commission, told members Wednesday that it is important for the commission to understand generators' impact and to see if "safeguards need to be put in place." The agency has already begun speaking with its regulated utilities.

"And I believe they're going to have some good data that's going to show what the impact is on their systems individually and areas, where it's affected, where you see these spikes," Frey said.

The commissioners didn't discuss potential safeguards Wednesday, but, in an earlier interview, Francis said he plans to ask the commission to consider a demand charge for natural gas use similar to those in place for some electricity users.

The demand charge collects a special fee for the highest level of electrical use in a billing period. Francis said a similar kind of fee for gas systems could create investment income to increase gas delivery capacity.

Exactly how many natural gas-fed home generators are in Louisiana and how much their numbers are growing is unclear. The public service commission does not maintain records on gas generators in use because they aren't in the agency's purview, Cook said.

Chaisson estimated roughly one-third of Lafourche homes have home generators, based on permit data.

Generac, one of the leading brands in the state, says it has only reached 6.25% home market penetration nationwide, though some areas are as high as 20% penetration, and expects continued growth, a company investor presentation says.

In federal regulatory filings, Generac, a $10.5 billion public traded company, says potential customers are grappling with increasing uncertainty due to climate change, placing a higher priority on steady supplies since more work from home, and are desiring cleaner technologies like natural gas and battery power. A spokesman for the company didn't return an email for comment.

Some utilities that responded to requests for comment also couldn't or didn't provide a tally of customers with home generators.

Entergy provides gas service to metropolitan New Orleans and Baton Rouge and a combined 204,000 customers.

David Freese, Entergy spokesman, said the utility monitors pressure changes on its gas system in real time but noted that customers sometimes install generators and other devices that increase gas demand without telling the company.

"Adding load without notification limits our ability to track individual devices and appliances, and as a result, we don’t maintain a complete list of homes with generators," Freese said. "Often, we only learn about new equipment when an issue arises."

Freese said Entergy uses its continuous monitoring and computer modeling to predict sudden demand increases.

"Before major events like hurricanes, we coordinate with gas suppliers to ensure uninterrupted service," Freese said.

Entergy has not had widespread gas supply problems in recent years, he said.

Atmos Energy is the largest natural gas supplier in the state of Louisiana, with 378,000 customers in 270 communities, including Lafayette, Monroe, Metairie and communities on the North Shore.

Atmos says it prepares year-round to keep its gas supplies and deliveries consistent, including for elevated demand during extreme events, and is ready to work with the commission on the generator investigation.

Atmos says it does not handle home generators but has not experienced distribution disruptions due to them.

The company did urge residents to use a certified professional to install home generators and to tell their natural gas company about the installation "to make sure you have the correctly sized regulator and meter and receive the correct pressures."

Another major gas provider in the state, CenterPoint Energy, and the Lafourche-area provider South Coast Gas didn't return requests for comment.

Editor's note: This story was updated at 4:31 p.m. Wednesday, Oct. 16, 2024, to include comments from Atmos Energy.

David J. Mitchell can be reached at [email protected].