Advancing toward fuller adoption of solar energy has always been a delicate dance of public policy. How much should Hawaii enrich the benefits to those electricity customers contemplating installing a system, versus considering how that affects costs for other ratepayers who don’t have the means to do so?
It appears that state lawmakers may be moving too far in favor of the first group rather than the second — particularly concerning, because the agency with the responsibility and the expertise to deal with this question is pointing in exactly the opposite direction.
That agency, the state Public Utilities Commission (PUC), has approved a program, set to begin March 1, that assigns rates of compensation from Hawaiian Electric to ratepayers who export power from their photovoltaic panels and battery systems to the electric grid.
However, under proposed legislative bills, these customers would be credited for the exported electricity “at the full retail rate” for the time of the export, more than what the PUC approved. One of the bills, House Bill 1687, was passed by the House Committee on Energy and Environmental Protection, which made largely technical amendments. It won the favor of multiple environmental groups advocating for increasing renewable energy and of solar-energy industry groups.
On Dec. 4, the PUC had reduced the export credit rate but settled between what Hawaiian Electric wanted and what industry groups supported.
Both the Hawaii State Energy Office and the state’s consumer advocate had argued before the PUC that higher compensation would lead to higher electric bills for customers who don’t have rooftop solar. That is a persuasive argument: Growing the sector of customer-generated solar electricity must not be done entirely on the backs of the non-adopters.
The Senate Energy, Economic Development and Tourism Committee seemed more sympathetic to these agencies’ positions and rightly deferred its companion measure, Senate Bill 2986, following a Feb. 1 hearing.
The export credit rates vary according to the island and the type of customer and program, PUC Chairman Leo Asuncion told the committee, but he put the approved rate for Oahu at 33 cents per kilowatt hour. That compares with the full retail rate of about 7 cents more.
“The commission, in our decision … basically took the middle ground,” Asuncion said. “And that ended up being evening rates.”
Proponents of the higher credit rate have submitted a motion for reconsideration of that decision, he said, which is pending before the PUC.
State Sen. Donna Mercado Kim, an energy committee member, observed that the bill, which would take effect July 1, would amount to an “end run” on the commission. Asuncion said the PUC would have to reopen the docket on the case, already under review every three years.
This would be a wrongheaded move. Many of those opposing the bills have pointed out that setting utility rates should be a matter for the PUC, not the Legislature.
But micromanagement of a government agency is not the only issue here. Increased rates on those not yet benefiting from the savings of solar power is a real problem in these days of rising costs.
Asuncion said for the first three years of Oahu’s Battery Bonus program, importing 40 megawatts of solar power, participants were credited at full retail rates, which reduced utility revenue by $2 million annually. If it continued at full rates for the program’s remaining seven years, which takes in 70 megawatts, about $3.5 million would have to be recouped, affecting the conventional customer base, he said.
Bottom line: The PUC has done a reasonably fair balancing of interests here. Let the commission do its job, lawmakers, and spike both bills.