Editorial: Speed up efforts to reduce oil use

There is news on the energy front that is sunny — and not so sunny.

Starting in October, electric bills will be going up and likely will stay elevated for some still-undefined period. This level of uncertainty and expense is part of the bumpy ride Hawaii residents have to endure as the state weans itself from its dependence on fossil fuels and contends with the climate-change crisis.

The sun broke through on Thursday, however. Hawaiian Electric Co. was happy to unveil the first utility-scale solar-plus-storage facility on Oahu, an array of 123,000 photovoltaic panels on 131 acres where pineapple used to grow.

The developer, San Francisco- based Clearway, will sell the power to the utility for 9 cents per kilowatt hour (kwh). That’s far cheaper than oil-produced electricity, the price of which recently has skyrocketed to about 30 cents/kwh.

Despite this progress toward a green-energy future, the utility appears far from done with costly fossil fuel.

The coal-fired plant run by AES Hawaii at Campbell Industrial Park will be shut down on Sept. 1 after 30 years. Under a 2020 state law, one of the statutes guiding Hawaii’s transition to clean energy, the use of coal for power generation is prohibited here after Dec. 31.

What’s available to replace the 180 megawatts AES produced? Not nearly enough renewable energy yet. So high-priced oil is still part of the picture, bumping up fuel costs by about 7%. The typical customer will pay about $15 more per month, the utility says.

This couldn’t have happened at a worse time, and everybody knows it — including Hawaiian Electric executives, who acknowledge that ratepayers are already bearing up under inflated prices for all consumer goods.

Some cost increase was projected with the end of coal, which produces electricity at about 6 cents/kwh. But that increase had been estimated at only $2 per month, before the war in Ukraine and other factors drove up oil costs to historic levels, with the fuel charge to ratepayers boosted accordingly. This bill adjustment is largely a pass-through to the customers, specifically for fuel costs.

The fuel pass-through is allowed under the state Public Utilities Commission’s regulation, although in 2018, the agency approved a change to spread some of the risk of fuel price volatility.

The so-called “fuel cost risk sharing mechanism” divides the burden for volatile prices, with ratepayers bearing 98% and the utility responsible for 2%, a liability capped at $2.5 million for Hawaiian Electric. Given the current market conditions and the strains on ratepayers, it may be time to revise the 2% share upward.

More immediately, petroleum prices are beginning to ease worldwide. That offers at least some hope for relief in the near term, said Jim Kelly, Hawaiian Electric’s vice president for government and community relations and corporate communications.

The utility has taken some hits from critics because not enough renewables are online to replace coal, even though the shutdown of the plant was anticipated since around 2016. That’s when AES set its original goal for ending coal generation, across all its corporate properties, by 2030, said Bernerd Da Santos, the company’s executive vice president and chief operating officer.

That deadline was moved up to 2025 company-wide, he said, with the 2022 date set in statute for its Oahu plant.

Da Santos is bullish on the prospects for clean energy becoming more affordable as production volume increases. The company’s Kapolei, Waiawa and Waianae solar projects will add close to 100 MW and about 300 MW of battery storage, he said. The Waianae project, first out of the box, is set for operation in late 2023.

Da Santos acknowledged that pandemic-related problems, largely supply-chain issues, have delayed the projects. But even if those projects had been finished, Hawaiian Electric still would need firm power to keep the lights on, Kelly said.

Beyond the supply chain, there are more persistent permitting and procurement processes that take a long time — about five years at best, start to finish, for a new project. Kelly pointed to the governor’s establishment last year of the Powering Past Coal Task Force as an encouraging improvement: It assembled stakeholders and cut through some of the projects’ red tape.

Also, Congress on Friday passed a measure including $369 billion in climate and energy provisions; that should help Hawaii, along with other states, at least on the margins.

Still, it’s disconcerting to see how much of a struggle it has been to reach even this intermediary milepost. The state’s final goal of 100% clean energy by 2045 looms in the not-so-distant future. Success will depend on homegrown efforts, innovation and plain hard work, and there is no time to lose.