Local industry news
Local industry news
Nov. 27: Blue Planet Foundation submitted these comments to the U.S. Environmental Protection Agency regarding the proposed administrative rules for implementing the State of Hawaii's mandate to reduce greenhouse gas emissions to equal to or below the 1990 levels of greenhouse gas emissions by 2020.
Filing, Nov. 20: Hawaii Renewable Energy Alliance's Joinder to Blue Planet Foundation's Information Requests to Hawaiian Electric Company, Inc., Hawaii Electric Light Company, Inc., and Maui Electric Company, Limited
Filing, Nov. 12: Blue Planet Foundation's Initial Statement of Position
Local industry news
Sustainable Business: Solar industry wins in Arizona (sort of): Net metering preserved
Local industry news
Star-Advertiser: Manage PV growth to help ratepayers
Energy news round-up:
The new face of HECO - Pacific Business News, Nov. 15
Solar Farm Surprise? HECO Won't Say Where It's Putting New Huge Energy Projects - Civil Beat, Nov. 12
Molokai Ranch plan for energy independence - Presented at Molokai Clean Energy Initiative meeting, Oct. 29
2013 Election Key Votes to Watch – Results - Sustainable Business, Nov. 12
Philippines blames climate change for monster typhoon - Grist.com, Nov. 11
Blue Planet filings:
1. DECOUPLING (2013-0141)
2. Blue Planet was part of the Hawaii Refinery Task Force and submitted comments/revisions for the Draft Interim Refinery Closure Report prepared by ICF International. Our comments make the following key points:
View our comments here.
1. INTEGRATED RESOURCES PLANNING (IRP)
The purpose of this informational briefing is to receive an update from the Hawaiian Electric Company on recent changes to its solar photovoltaic grid interconnection policies, the justification for the change, and how solar installers and consumers will be affected.
Monday, October 14, 2013
Conference Room 325
415 South Beretania Street
The following organizations will give presentations:
· Hawaiian Electric Company
· Hawai‘i Solar Energy Association
· Hawai‘i PV Coalition
· Interstate Renewable Energy Council
COMMUNITY RENEWABLE POWER
Governor Abercrombie has signed Senate Bill 1087 into law. The landmark legislation creates a mechanism to secure low-cost capital for clean energy projects. This financing can be used as an anchor source of funding that will help maximize participation in Hawaii's on-bill financing program, providing alternatives for renters and low-income residents who may not have access to traditional sources of private capital to pay for energy improvements. Learn more about GEMS here.
Friday’s MECO rate case decision included an unprecedented reproach by the PUC in the form of a six-page addendum attached to the order. We include the clearly articulated reasoning of the “Commission’s Observations and Perspectives” here and commend the PUC for ensuring that the public utilities serve the public interest, and when they do not, holding them accountable.
Commission's Observations and Perspectives
The commission believes it is timely, necessary and essential to outline fundamental, emerging issues pertaining to the operation and regulation of investor-owned electric utilities in Hawaii to set a course that is mutually beneficial to utility shareholders and utility ratepayers.
The commission has observed that electric customers are increasingly frustrated because of high electric rates. These concerns were also expressed by the 2013 Hawaii State Legislature in connection with Senate Bill 120, Session Laws of Hawaii 2013, which authorizes the commission "to establish a policy to implement economic incentives and cost recovery regulatory mechanisms, as necessary and appropriate, to induce and accelerate electric utilities' cost reduction efforts, encourage greater utilization of renewable energy, accelerate the retirement of utility fossil generation, and increase investments to modernize the State's electrical grids." Therefore, the commission's Decision and Order in the instant docket and the simultaneous filing of the decoupling mechanism investigation is intended to serve notice to Maui Electric Company, Limited ("MECO"), as well as the other HECO Companies.
The commission understands the importance of and supports the concept of delinking electricity sales from revenue. However, existing automatic adjustment mechanisms appear to unduly insulate the HECO Companies from the need or urgency to make major adjustments to current utility management and operational practices, thus offering no motivation to implement strategies and action plans that may be more conducive to serving the public interest.
The commission is concerned that the 2008 "Energy Agreement" may be the principal foundation for HECO Companies' overall business strategy. The HECO Companies' over-reliance upon a link between the Agreement and utility financial health obfuscates utility performance and ultimately customer service and satisfaction. The commission affirms its commitment and support of Hawaii's clean energy transformation. However, clean energy in and of itself is not the singular goal but rather should be viewed as one strategy to serve the public interest along with sound business practices centered on customer value.
From the commission's perspective, the HECO Companies appear to lack movement to a sustainable business model to address technological advancements and increasing customer expectations. The commission observes that some mainland electric utilities have begun to define, articulate and implement the vision for the "electric utility of the future." Without such a long-term, customer focused business strategy, it is difficult to ascertain whether HECO Companies' increasing capital investments are strategic investments or simply a series of unrelated capital projects that effectively expand utility rate base and increase profits but appearing to provide little or limited long-term customer value. While a public utility is required to have a reasonable opportunity to earn a fair financial return, attractive financial returns are not an entitlement by virtue of being a regulated utility.
The HECO Companies have characterized various automatic adjustment mechanisms that are used as regulatory cost recovery as an "Improved Regulatory Model" for security analysts in lieu of traditional general rate cases. Unfortunately, these automatic adjustment clauses are not linked to key performance measures such as rate affordability and customer satisfaction.
The commission believes that a well-managed, customer focused electric utility is one that is driven by a management philosophy and corporate culture to provide superior customer value through affordable electric rates and outstanding customer service, as defined by its customers. Top performing utilities embrace a well-researched phenomenon known as the virtuous cycle or virtuous circle where positive performance drives positive regulatory outcomes, which drive positive financials, which can then be reinvested in the utility to keep that cycle going.
Conversely, the opposite phenomenon, a "vicious cycle" also can happen. Poor performance drives poor regulatory outcomes and financial penalties starting a downward cycle in the opposite direction.
The virtuous cycle is readily apparent to those who follow and critically analyze electric utility financial performance. As a result, it is common knowledge among these professionals which utilities are top industry performers and whether the HECO Companies are recognized among the industry's elite performers in this regard.
The extent of the HECO Companies' own volition to achieve high performance, provide excellent customer service and affordable rates will determine the appropriate amount of regulatory oversight required. Otherwise, the commission would be forced to employ arduous regulatory scrutiny and oversight of utility expenditures, operations and investments to attempt to achieve the desired performance levels and customer satisfaction. The commission prefers the former but unfortunately, at the present time, believes the lack of a strategic and sustainable business model would require more of the latter until there is evidence of an acceptable course correction.
To this effort, the commission is committed to work collaboratively with the HECO Companies, Consumer Advocate, and other stakeholders for timely regulatory responses and action. The commission remains committed to alternative regulatory mechanisms to minimize regulatory lag and uncertainty and is open to innovation to streamline the ratemaking process to the extent they would be in the public interest. However, the achievement of a high performing, customer focused and financially viable electric utility with affordable rates is the responsibility of the electric utility management, not the commission, to deliver on its responsibilities and obligations to uphold the regulatory compact. The public interest demands no less.
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SB1087, which estabishes a green financing loan program that can help fund on-bill financing, passed out of conference committee and is headed to the floor for a final vote. Learn more about the program here or read the Star-Advertiser article here. Our program director, Richard Wallsgrove, was there at the legislature fighting for it all the way. Go Richard!
"It's a game-changer, that's the best way to put it," said Richard Wallsgrove, program director at the Blue Planet Foundation.
"It's innovation because we're taking all of these pieces that people have figured out — rich guys in suits in New York who have figured out how bonds work to finance big projects — and rather than financing coal plants and nuclear power plants, now we're going to finance rooftop solar, energy efficiency in homes — so, things that are directly going to drive down people's bills. And anybody can sign up for it. There's no limit to the impact it could have on our energy infrastructure."
By replacing oil with sunshine, we’re keeping $1.13 billion in Hawai‘i that would otherwise be spent on importing fuel for electricity. that’s a significant sum of money—not just to afford frivolous things, but enough to fund big pieces of a better future for the next generation: early childhood education for nine years, healthcare for a year for every child under 14, or a two-year scholarship to UH for every high school student.
Solar energy has been a bright spot in Hawai‘i’s drive toward energy independence, and the renewable energy tax credit has effectively helped Hawai‘i become a national leader in solar installations. Solar’s growth has created 9,000 local jobs, generated additional tax revenue, and kept money circulating in our local economy rather than being shipped overseas.
Investments in solar water heaters and solar photovoltaic systems will pay dividends that benefit every Hawai‘i resident over the lifetimes of these systems:
• Keeping $1.13 billion in our economy
• Displacing 8.68 million barrels of imported oil
• Preventing the release of 7.3 million tons of carbon dioxide into the atmosphere
Contrary to conventional perception, solar is not only for the wealthy. The solar tax credit has served as a critical mechanism for making solar accessible to a broadening range of homeowners. Blue Planet Foundation’s analysis of more than 22,000 building permits for photovoltaic (PV) systems on O‘ahu issued between January 2002 and December 2012 found that the uptake in PV system installations is accelerating most quickly in zip codes with lower median incomes, spanning Leeward, Central and Windward O‘ahu. Adoption of PV by lower income households provides relief from high electricity bills to those who stand to benefit the most.
The abrupt elimination of the renewable energy tax credit will halt the momentum that has made Hawai‘i a leader in solar adoption and jeopardize the stability of an industry that represents 26 percent of the state’s construction expenditures. An incremental ratcheting down of the tax credit will produce more desirable consequences than the wholesale unraveling of the industry at its height.
Blue Planet Foundation and a broad coalition of regulators, solar installers, and renewable energy advocates agree that a phased reduction over time in the state solar tax credit is the right approach, aligning the tax credit with the decreasing cost of the technology while still providing enough nudge to spur private investment in solar. We urge the State to take a smart, balanced approach and adjust the tax credit as recommended in Senate Bill 623.
The state renewable energy tax credit has increased the adoption of solar energy, while growing the economy, producing jobs and reducing our dependence on imported oil. If you support local energy, please urge your legislator to vote YES on SB 623.
Solar is good for Hawai‘i. Let’s keep it growing and see what possibilities we can achieve.
Enquiring minds and legislators want to know, so we asked. Here are findings from our market research on consumer attitudes toward solar and the solar tax credit. The quantitative study was conducted in March 2013.