Catharine Lo

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Aug 29
2014

Recently, Hawaiian Electric filed a series of plans, intended to guide the utility’s path through 2030. We have applied to the Public Utilities Commission (PUC) to take part in evaluating the plans. In our initial review, we have questions about the plans and whether it achieves the transformation needed. Blue Planet will be working with experts to understand exactly what has been proposed, what the changes mean for customers, and how the plans can be improved.

Below are our initial comments and questions, triggered by the plans’ own description. Some aspects of the plan are positive: They begin to take a more realistic picture of the value and benefits of renewable energy. For example, when Hawaiian Electric thought there was a “close call” between a renewable and non-renewable option, the renewable option was chosen. The effects of volatile fossil fuel prices were considered, with a preference toward renewable energy with a known cost. The utility has shown a willingness to collaborate with industry and community stakeholders to optimize Hawaii’s energy plan.

We encourage additional feedback and questions from everyone. The utility exists to serve its customers. When customers ask questions, that process can be a powerful driver for improvement.


Hawaiian Electric Plan:

“Increases customer-owned distributed generation three-fold”

Clean Energy Viewpoint and Questions:

Although the plans do allow for gradual installation of rooftop solar over the next 15 years, the plans will slow down annual solar growth by a factor of 20, by making itmuch more expensive for customers to use rooftop solar power. At recent growth rates, customers would choose to triple the amount of solar power in the next three years. Under the plan, it will take fifteen years.

In recent years, customers have installed rooftop solar panels at a growth rate of around 100% annually (2011-2013). Because the new plan proposes to make solar power more expensive for customers, Hawaiian Electric forecasts that solar growth will slow to less than 5% annually (2014-2030). In addition, thousands of customers are already waiting for utility approval to install solar panels. Slowing the growth of solar means that once this backlog is cleared, the plan could severely limit customers who wish to go solar in the future.

The plans’ suggested “DG 2.0” (distributed generation) rate design will eliminate the popular net energy metering plan, and will increase the fixed charge for solar customers to $71 per month. The price that customers receive for their excess solar power will be cut in half. The result will be larger solar systems installed by fewer people, with customers incentivized to over-size the system to make up for the lower rate. These fewer, but bigger, solar systems will make it harder for low-income households to install solar, and could contribute to circuit penetration problems. This will also have the effect of minimizing the degree to which PV acts like efficiency by offsetting coincident load (i.e. when solar power is used at the same house where it is generated). Currently, around 8000 net energy metering customers export excess energy to the grid, at no charge to the utility.

A better approach would optimize the costs and benefits of solar power, perhaps by establishing a time-of-use and dynamic rate structure to encourage load shifting (i.e. maximizing PV production with coincident load). Fixed charges should be rationally related to the actual standby/capacity required for the PV owners—for example, a charge based on how big the system is and how much energy the customer will demand when the sun isn’t shining. Customers who don't export energy to the grid should be charged differently than customers who do. The grid benefits of distributed generation, such as reduced transmission losses, eliminating the daytime capacity peak, excess solar energy exported to the grid, and progress toward clean energy goals, must be accurately accounted for. A forward-thinking business plan will find ways for the utility to make money by making it easier for customers to plug solar power into the grid, rather than making it harder.


Hawaiian Electric Plan:

Utilize energy storage and demand response to minimize the amount of ‘must-run’ fossil-fueled generation needed to provide essential grid services”

Clean Energy Viewpoint and Questions:

This is encouraging. Finding ways to incorporate energy storage will support the utility’s shift from a company that sells kilowatt-hours, to a company that makes it possible to use more and more clean energy.

The risk here is underestimating the market. In 2008, for example, the utility and the state planned for 23 megawatts of rooftop solar power on Oahu by 2015. Customers beat that estimate ten times over, with around 200 megawatts installed today. With the right market incentives, could we beat the plan’s storage estimate by a factor of ten? Will the system and the company be ready to use that much storage, and the renewable energy it will enable?


Hawaiian Electric Plan:

“Procures liquefied natural gas (LNG) coupled with modifying certain generating units to burn LNG”  and “Installs new LNG-fired combustion-turbine and combined cycle capacity to replace retired thermal units, which provides the generation flexibility necessary to accommodate high penetration of distributed and utility-scale renewables”

Clean Energy Viewpoint and Questions:

The utility anticipates swapping oil for large quantities of imported industrial gas (LNG). Are more fossil fuels the answer to the problems created by fossil fuels?

Under the industrial gas plan, LNG will be imported to Hawaii after it is drilled from the ground via hydraulic fracturing process—fracking. Fracking will expose communities to numerous environmental, safety, and health hazards. Also, industrial gas is mostly made of methane, a greenhouse gas roughly 30 times more potent than carbon dioxide. That methane will leak to the atmosphere during the drilling, extraction, processing, liquefaction, and transportation stages. This toxic leakage can pollute groundwater and create climate impacts that are just as bad as the oil we are currently using.

The cost of swapping from oil to industrial gas is still unclear. The plan forecasts the price of gas dropping by around 25% in 2022. If this prediction doesn’t materialize, can an industrial gas plan really deliver the promised 20% electricity savings? Once we add the cost of shipping the gas to Hawaii, the cost of modifying existing generators to burn the gas, the cost of building new power plants to burn the gas, the cost of building storage for the gas, and the cost of paying for the environmental impacts, how long do we need to use gas to recoup that upfront cost? Who will pay the price if gas can’t deliver the promised savings—customers or utility shareholders?

In some scenarios, a gas plant plus a solar farm is cheaper than a gas plant alone. This is because the biggest expense for fossil-fueled electricity is the cost of the fuel. By using the solar farm when the sun is shining, the gas plant can burn less fuel and save money. If industrial gas is part of Hawaii’s energy plan, how can we be sure that it is used as little as possible and retired as soon as possible?


Hawaiian Electric Plan:

Converts AES Hawaii from 100% coal to 50% biomass and 50% coal”

Clean Energy Viewpoint and Questions:

Burning less coal is certainly a step in the right direction. But the plan seems to contemplate a long-term agreement to continue burning 50% coal. Oahu would be reliant on imported coal for nearly 10% of its electricity needs in 2030 and beyond. Is this the right balance for Hawaii? Large generators like AES coal are large, inflexible powerplants that lack the ability to follow the shifting needs of system powered largely be renewable energy.


Hawaiian Electric Plan:

"Result in more than 65% of the Companies' energy being provided by renewable resources”

Clean Energy Viewpoint and Questions:

This 65% target is encouraging, and it illustrates that the current state target (40%) is just a floor for Hawaii’s energy possibilities.

However, it appears that a large portion of the 65% is derived from waste-to-energy and burning biomass in the AES coal plant. While waste and biomass can be smart strategies to back up a system powered by local and sustainable energy resources, they need not be the primary clean energy components.


Hawaiian Electric Plan:

Deactivates all the existing oil-fired generators”

Clean Energy Viewpoint and Questions:

This is encouraging, and it illustrates that old energy infrastructure is not a barrier to moving into a more modern system. The key will be to replace oil-fired generators in a ways that do not limit the utility’s flexibility in adopting new technology.  If we simply replace old fossil fuel power plants with new ones, will that limit our clean energy options?


Hawaiian Electric Plan:

“Adds large amounts of new utility-scale solar” and “Adds modest amounts of new utility-scale wind”

Clean Energy Viewpointand Questions:

Over the next five years, the plans allow for the addition of solar and wind power from projects that have already been proposed. After that, the addition of new solar, wind, and geothermal power is relatively limited.

The plans call for 324 MW of new wind and solar over the next five years. Many of those projects are already “in the pipeline.” Hawaiian Electric has selected a number of proposals for energy at less than 16 cents/kWh (for comparison, oil-powered electricity is at around 22-23 cents/kWh), and approval from the PUC is awaiting submission of final agreements between Hawaiian Electric and renewable energy companies.

Over ten years from 2020 to 2030, the plans call for only 170 MW of new solar, wind, or geothermal power (around 14% of Oahu’s current peak load). Further, some types of resources, such as offshore wind farms and wave energy, which are already used in other parts of the world, were not included as options for this future timeframe.


Hawaiian Electric Plan:

“Aggressively expands our demand response programs”

Clean Energy Viewpoint and Questions:

This is encouraging.Demand response means using energy in a way that matches local supply. A truly aggressive approach to demand response will mean that this is more than just a utility program; it will be a core function of the utility’s business and revenue model. Are we finding all the demand response opportunities?


Hawaiian Electric Plan: 

Create a state-of-the-art energy delivery system (the grid) as the platform for the new energy portfolio and customer options”

Clean Energy Viewpoint and Questions:

The utility’s most important asset is the grid and the ability to improve the grid’s ability of creating options for customers, so making this a focus is encouraging. Does the plan envision developing a diversity of revenue streams that support and complement this core strength? Can the utility help customers, and also generate revenue from things like:

  • Electric vehicles, to allow customers to lower commuting costs, while making it easier for the grid to use more renewable energy?
  • Community solar, to allow renters and condo residents to use solar power?
  • Distributed storage, to enable customers to use their energy more effectively?
  • Leasing programs like solar or grid-interactive hot water systems, so that customers get the services they need at a lower price?

A first step for this state-of-the-art energy system is installing smart meters to enable a more dynamic approach to the utility business. The utility has begun the process of installing smart meters, with a plan to upgrade most meters by 2018.

 

 

Aug 28
2014

This file includes public comments (Aug. 27) and (Aug. 28) that have been submitted to the PUC in response to the plans that Hawaiian Electric submitted on Tuesday. You can look up related action on the PUC's DMS site: http://dms.puc.hawaii.gov/dms/ . The docket number to search is 2014-0183.

To date, the following parties have applied to be intervenors in this docket:

Renewable Energy Action Coaltion of Hawaii, Inc.

Life of the Land

NextEra Energy Hawaii

Hawaii Solar Energy Association

Puna Pono Alliance

County of Maui

The Alliance for Solar Choice

Hawaii Renewable Energy Alliance

Hawaii Gas

AES Hawaii, Inc.

Blue Planet Foundation

Ulupono Initiative, LLC

Hawaii PV Coalition

Department of Business, Economic Development, and Tourism

Sierra Club

Tawhiri Power

Sunpower Corporation

Paniolo Power Company, LLC

Eurus Energy America Corporation

County of Hawaii

First Wind Holdings, LLC

Aug 26
2014

Meeting a 120-day deadline set by the PUC in April, the Hawaiian Electric Companies submitted Power Supply Improvement Plans for HECO, HELCO, and MECO today, as well as a Distributed Generation and Interconnection Plan for all the HECO companies. They can be downloaded from the PUC's website.

Blue Planet is currently reviewing these hefty documents. Stay tuned for our response. Here are related articles:

PUC press release: PUC Receives the HECO Companies' Action Plans to Achieve State Energy Goals

Hawaiian Electric press release: Hawaiian Electric Companies Submit Plans for Hawaii's Energy Future

Solar Industry Mag: Hawaiian Electric's solar plans put new focus on DG interconnection

Civil Beat: Does HECO have a plan for the 21st century?

Star-Advertiser: HECO plan raises solar costs

KITV: Hawaiian Electric's plan for energy future relies on LNG and would impact rooftop solar

KHON: HECO outlines plan to lower rates, increase solar by 2030

Hawaii News Now: Does HECO's new energy plan save customers money?

PBN: Hawaiian Electric plans to level the playing field for rooftop solar

PBN: End of Hawaiian Electric Co.'s solar net energy metering inevitable, sources say

Star-Advertiser: HECO plans to cut bills by 20% by 2030

PBN: Hawaiian Electric Cos to triple rooftop solar, lower customer bills by 20% by 2030

Civil Beat: HECO plans promise cleaner energy at lowere costs by 2030

KITV: HECO releases energy plan and watchdogs react

Hawaii News Now: HECO files energy plan just before deadline

KHON: HECO delivers massive comprehensive strategy to PUC at deadline

***

As reviewers pore through the 2,000+-page document, here are some general questions to determine if the plan moves the utility toward a business model that serves the public interest:

1)   Does the selected mix of firm and as-available resources minimize energy costs?

2)   Are energy storage and demand response—or other non-traditional sources of ancillary services—considered?

3)   Is curtailment of renewable energy minimized and handled in a cost-effective manner for ratepayers?

4)   Are older, less-efficient fossil generation units being retired expeditiously?

5)   Is there a reduction in must-run generation?

6)   Is there increased generation flexibility?

7)   Do their proposed changes in operational practices enable the integration of additional low-cost renewable energy resources?

8)   Are the strategies in the individual HECO, MECO, and HELCO plans consistent with each other, or do they complement or reinforce the proposed improvements?

9)   Are there contradictions within or among the individual HECO, MECO, and HELCO plans?

10)   Are the plans readily actionable?

Aug 23
2014
Public Utilities Commission

On Aug. 21, the PUC filed a letter explaining the opening of Docket No. 2014-0183: Instituting a Proceeding to Review the Power Supply Improvement Plans for Hawaiian Electric Company, Inc., Hawaii Electric Light Company, Inc., and Maui Electric Company, Limited. This docket was opened in anticipation of HECO's power supply, expected to be filed on Tuesday, Aug. 26.

Local Industry News

8/29  PBN: Construction on Honolulu's King Street bicycle lane to start Sept. 8

8/28  PBN: Hawaii is a one refinery state, energy expert says

8/28  PBN: Hawaii's only coal-fired power plant being asked to add biomass to mix

8/26  Star-Advertiser: Protest calls on HECO to uphold energy aims

8/26  PBN: Major decisions due for Hawaii's slowing solar energy industry

8/25  PBN: Coco Palms Resort solar project on Kauai to include battery energy storage system

8/25  Star-Advertiser:  Waianae solar farm sold for $2 million

8/25  PBN: Nevada's Blue Earth sells Hawaii solar farm to Kenyon Energy

8/25  Star-Advertiser: HELCO crews turn attention to debris clean-up

8/24  Star-Advertiser: Consumers deserve control, choice, and value

8/23  Star-Advertiser: Oahu electric bills up again

8/23  Star-Advertiser: Solar vigil

8/23  Star-Advertiser: Rally seeks faster action from HECO on solar initiatives

8/23  PBN: Hawaii solar firms RevoluSun, Distributed Energy Partners restructure

Aug 18
2014
Public Utilities Commission

On Aug. 21, the PUC filed Order No. 32269 Instituting a Proceeding to Investigate Distribute Energy Resource Policies (Docket No. 2014-0192). Download the filing here.

Local Industry News

8/22  Star-Advertiser: Dow Solar brings PV shingles to isles

8/21  PBN: Hawaiian Electric strikes deal with Canada's largest private utility

8/21  Star-Advertiser: Program pays cash for old refrigerators

8/20  Hawaii News Now: Expectations high for HECO energy plan

8/19  Energy Information Administration: Hawaii and US Territories aim to increase fuel diversity with LNG imports

8/19  Time Magazine: Why Hawaii wants liquefied natural gas

8/18  PBN: Oahu's solar PV industry continues slowdown on permitting side

8/15  PBN: Hawaii solar energy industry, Hawaiian Electric need to work interconnection issue out together, solar exec says  

8/15  PBN: Hawaii undersea cable unlikely to get support if Ige or Hannemann elected governor

Aug 13
2014
Aug 04
2014
Jul 28
2014
Jul 21
2014

The State Energy Office has released their most recent ranking of current clean energy projects that are leading the way in Hawaii's transition away from fossil fuels. As stated on their website: "Energy leaders have been identified based on public information about (a) their projected size, (b) status of permitting, (c) status of power or fuel off-take agreement, and (d) site control. Pertinent data comes from a variety of media including company press releases, company websites, newspaper articles, Internet publications, agency notices, and filings with the Hawaii Public Utilities Commission." Here are the Top 10:

1. Honolulu Airport Emergency Power Facility / State Department of Transportation, HECO

2. Green Energy Agricultural Biomass-to-Energy Facility / Green Energy Team, LLC

3. Honua Power Project  / Honua Technologies

4. Hu Honua Bioenergy Facility / Hu Honua Bioenergy, LLC

5. Hawaii BioEnergy Integrated Biorefinery Facility / Hawaii BioEnergy

6. Anahola Solar / Homestead Community Development Corporation, REC Solar, Kauai Island Utility Cooperative

7. Koloa (KRS2) Solar Project / Kauai Island Utility Cooperative, Grove Farm, SolarCity

8. IC Sunshine Solar Project / IC Sunshine, SunEdison, Axio

9. AKP Kau Renewable Fuel Facility / Aina Koa Pono

10. Schofield Generating Station Project / Hawaiian Electric Company, Inc.

There's also a directory where you can search through renewable energy projects in progress.

Jun 10
2014

There has been action on two programs that Blue Planet championed that will help increase the adoption of solar power and energy efficiency improvements for Hawaii homes and businesses. Last week, the PUC opened a docket to implement on-bill financing, which has been named "Hawaii Energy Bill Saver Program." And yesterday, the state filed two applications with the PUC to authorize the Green Energy Market Securitization (GEMS) program, which secures low-interest capital for renewable energy and energy efficiency projects through green infrastructure bonds backed by ratepayer fees (that are to be offset by a reduction in the public benefits fee that ratepayers are already paying).

Read the PUC filings here (if they don't load up, enter the docket number manually here):

Docket No. 2014-0129 Instituting a Proceeding to Establish and Implement an On-Bill Financing Program

Docket No. 2014-0134 Application for a Financing Order to Issue Bonds and to Authorize the Green Infrastructure Fee

Docket No. 2014-0135 Application for an Order Approving the Green Infrastructure Loan Program

Read news stories here:

Big Island Now: State asks PUC to Approve Solar System Loan Program

Business Week: Hawaii gov seeks clean energy financing approval

Star-Advertiser: Green energy funding sought

PBN: Hawaii green financing program heads to state regulators for approval

Press release from DBEDT: DBEDT Files Applications with PUC to Implement Green Energy Market Securitization Program

PBN: State regulators implementing "Hawaii Energy Bill Saver Program"