Hawaiian Electric Companies expects to meet a state-imposed 2020 deadline for generating 30% of electricity sales from renewable resources with relative ease. That’s progress, considering that a decade ago its renewable energy portfolio standard (RPS) was less than 10%.
The utility is now pursuing its most ambitious push to date as it seeks new, clean-energy projects to provide 900 megawatts of replacement service as coal-fired AES Hawaii on Oahu is slated to close in 2022, and the oil-fired Kahului Power Plant on Maui is set for 2024 retirement.
With the approval of the Public Utilities Commission (PUC), HECO last week issued requests for proposals for renewable energy and grid services from developers locally and globally. If a planned timeline holds, the first projects would come online within three years.
If all projects are online by 2025, HECO officials say, the move could bump up the RPS to 60% — well ahead of milestones for Hawaii to meet a mandated 2045 deadline to reach the 100% mark. Given Hawaii’s unwanted status as the most petroleum-dependent state in the nation, that’s an encouraging green trajectory.
However, in a recent meeting with the Honolulu Star-Advertiser’s editorial board, Alan Oshima, Hawaiian Electric’s president and CEO, stressed cautious optimism in the ongoing quest toward the renewable goal.
“We’re in uncharted territory as leaders in the U.S. on moving down this road,” he said, pointing out that the utility has little or no control over some key matters, such as access to available land in the islands for renewable projects, land policies and court decisions. “We just have to be ready to accommodate and adjust,” Oshima said.
The companies are looking to evolving technology as key to nimble navigation. Along those lines, to help cover costs for grid modernization and other system improvements along with renewable energy investments, Hawaiian Electric filed a request Wednesday with the PUC to increase the base rate for electricity used by its customers by 4.1%.
If the proposed hike is approved, the monthly bill for a typical residential customer, using 500 kilowatt-hours a month, would increase by $8.67, likely taking effect in mid-2020 at the earliest. The utility bill last increased in February 2018, with a monthly hike of $2.60 for that customer.
In that case, a PUC-approved base rate increase of 2.5% turned out to be considerably lower than the initial 6.9% jump HECO had wanted — due, in part to a settlement between HECO and the state Consumer Advocate.
This time around, in the interest of ratepayers contending with Hawaii’s high-cost-of-living challenges, another rigorous vetting is in order.
HECO is required to submit rate cases every three years so state regulators and others can analyze the price tag for providing service — and provide the company with a reasonable rate of return.
The requested 4.1% increase would generate $77.5 million, according to HECO, which is now spending some $400 million a year on system improvements, with a large portion going to grid upgrades.
Earlier this year, the PUC gave approval to HECO’s first phase of a grid modernization, which aims to create two-way data exchanges, thereby improving energy tracking and allowing finely tuned adjustments to hold more clean energy on the grid.
Oshiro said such “connectivity” is needed to “give customers the information they need to manage their own energy, and allow us to manage” the system. That reach also includes stepping up cybersecurity and resilience efforts aimed at reducing outages and their duration during storms.
While the company seems to make a compelling argument for a rate increase of some sort, it should also continue to pursue other revenue streams, such as renting of utility pole space for broadband apparatus.
Meanwhile, if the 900-megawatt procurement for renewable energy resources proceeds snag-free, it could help lower utility bills while effectively ending the regular use of coal in the islands. In recent years, this dirtiest of fossil fuels has served as the source for about 15% of Hawaii’s electricity production — the runner-up to imported oil.
Among the replacement project possibilities: wind and solar, or either paired with storage; as well as stand-alone storage or grid services. With grid services, providers offer customers incentives to shift their use of electricity during high- or low-demand periods.
Regarding greenhouse gas emissions, Oshima said: “We’re on the right path. We’re down almost 20% from 2010. As we bring on more solar and wind and other projects, it will go down even more.” He acknowledged, though, that while the pace to more clean energy has been rapid in recent years, the path could become more challenging in coming decades.
“We all have to be holding hands moving forward,” said Oshima. It certainly will take collective efforts, balanced against justifiable rates, if Hawaii is to achieve its renewable goal by 2045 while maintaining a reliable grid — all so crucial to public health and safety as well as economic and lifestyle standards.
