Legislation that would establish state regulations for the leasing of offshore wind energy sites in the Gulf could be counterproductive due to a provision allowing the state to get a cut of the revenues generated, according to advocates for wind energy.
House Bill 165, authored by Rep. Jerome Zeringue (R-Houma), would establish maximum acreage for wind farms located in state waters, up to 3 miles from the Louisiana coastline. The maximum size of such leases would be 25,000 acres, according to the legislature’s analysis of the bill.
Under the bill’s provisions, the State Mineral and Energy Board would be allowed to enter into agreements with would-be leaseholders to secure the state a share of the energy revenues generated by new wind projects. This is also true of current offshore oil and gas facilities located in state waters.
But Katharine Kollins, president of Southeastern Wind Coalition, said giving the state a share of revenues generated from such projects would create uncertainty for potential buyers and could reduce the initial amount the state would get from the lease sale itself.
“You’re selling this power back to your constituents,” Kollins told the Louisiana Record. “Who’s going to pay for this in the end is Louisianans.”
Even so, the initiation of talks about renewable energy generation in the Gulf is helpful, she said, adding that she expects state lawmakers to be flexible about any legal framework the state eventually puts in place.
“Louisiana has a working coastline, and Louisianans are comfortable looking at various structures in the water,” Kollins said, pointing to the prevalence of oil and gas facilities off the coast. “That’s just something you don’t have in a lot of states.”
No other state allows for the state to get a cut of offshore wind farm revenues, she said. And no such provision is in place for such lease sales in federal waters, according to Kollins.
Taking a share of revenues for the state could be a disadvantage if a buyer is also looking at federal waters for a wind farm site, she said, although it’s not a straightforward trade-off because the cost-benefit analysis of any such project is extremely complicated.
No minimum revenue amounts generated by wind facilities are provided in HB 165, which allows the State Mineral and Energy Board to OK any bid it finds will benefit Louisiana, according to the analysis of the bill.
Despite concerns about some provisions, Kollins said the bill is helpful in terms of getting the ball rolling on wind energy policy.
“I think it’s a great step in the right direction just in terms of helping the state think about what state-based leasing looks like,” she said.