The Hawaiian Electric utilities have never been shy about supporting expensive projects, which is one of the reasons why Hawaii residents suffer from the highest electrical bills in the country.
From 2009 to 2012, the average resident’s bill went up 50 percent in price. That’s thousands of dollars more each year per person than, say, someone in Texas pays.
That’s why it’s a bit surprising that Hawaiian Electric suddenly now seems concerned about ratepayers and the "cost" of rooftop solar.
Claiming it has reached a crisis stage, Hawaiian Electric recently computed the cost of rooftop solar — without allowing for any offsetting benefits — at less than a whopping half a penny per kilowatt (0.43 cent per kilowatt hour on Oahu, 0.40 cent on Maui and 0.53 cent on the Big Island).
Even assuming Hawaiian Electric’s numbers are correct, it’s a fairly low number even without factoring in some of the significant benefits such as the free electricity put back on the grid, the millions in savings solar customers now receive or the massive job growth in Hawaii.
There is an issue here — rooftop solar owners can and should pay for the reasonable costs they cause — but let’s be real. Rooftop solar is not the reason why electrical rates are skyrocketing. Nor are they causing a massive, disproportionate impact on other ratepayers. And, if so, let’s talk about reducing the $6.8 million salary for the CEO of Hawaiian Electric Industries — HECO’s parent company — as a quicker way to reduce rates.
Something more fundamental is going on. Hawaiian Electric is desperately worried that its business model is changing underneath it. When people can create their own power cheaper, why should they buy power from the utility? Is the utility going to go away because people can start going off the grid with a solar and battery system?
And so Hawaiian Electric is now acting like a typewriter business trying to stop people from purchasing computers. Instead of trying to fight the solar revolution, Hawaiian Electric must become innovative and nimble.
Hawaii’s legislators recently passed a law that allows utilities to be paid more for grid modernization improvements that allow for more renewable energy. Hawaiian Electric can use this mechanism to switch from being a generator of energy to a distributor of energy. Hawaii can have a grid that allows power to flow between houses so that everyone benefits from clean, renewable energy.
Hawaiian Electric should also look at completely new revenue opportunities like investing in its own solar generation, developing energy storage, or even leasing out electric vehicles. Hawaiian Electric has to discover the courage to innovate.
But fighting rooftop solar — trying to stop residents from producing their own power — is not a viable long-term strategy. Hawaiian Electric has a monopoly based on the principle that it serves all customers. It cannot refuse a customer choosing to install rooftop solar simply because it prefers a different business model.
If it continues to go down this road, it will eventually find itself with a diminishing rate base as people cut the cord to Hawaiian Electric and simply choose to operate a solar system with a battery.
And the people left behind who can’t install rooftop solar — those in high-rise towers — will be left paying for a legacy business model.
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Robert D. Harris is director of the Sierra Club of Hawaii.
