A Hawaiian Electric Co. report outlining its strategy for meeting the energy needs of its customers fell short in several areas and did not adequately address the impact of the rapid growth of rooftop solar photovoltaic systems on the utility’s grid, according to consultant hired by state regulators to oversee the planning process.
The 2,200-page "integrated resource plan" released by HECO last month included several significant proposals, including the shutdown of a number of oil-burning power plants and the transition of all HECO customers on Oahu, Maui and Hawaii island to "smart meters." The report represented more than a year of work by the utility on how to meet a legally binding mandate to generate 40 percent of its electricity from renewable sources by 2030.
However, a consultant for the Public Utilities Commission said HECO failed to account for, among other things, the utility’s loss of revenue as more customers install PV panels and generate their own electricity instead of buying it from HECO.
"Concerns regarding customer exit in response to higher rates and further exacerbation of rate impacts have not been sufficiently addressed or dispelled in the IRP report," according to the analysis written by Carl Freedman, a Maui-based energy consultant.
The vast majority of HECO customers who switch to PV stay connected to the grid so they can receive electricity from the utility at night or during cloudy days. Although they pay HECO a monthly service charge of about $17, that isn’t enough to cover what it costs the utility to maintain the equipment needed to supply customers with power at all times. HECO calls the shortfall a "lost contribution to fixed costs," and in 2012 it was estimated at $12 million.
Freedman also questioned HECO’s contention that it wouldn’t necessarily need an undersea cable connecting Maui and Oahu counties in order to meet its target of 40 percent renewable energy.
"The conclusions asserted in the IRP report, that the HECO companies can meet and exceed renewable portfolio standards requirements economically, and that this can be accomplished without interisland energy transmission are based on several presumptions that are not supported by analysis," Freedman wrote.
Freedman said that because of his concerns, he was not able to certify the IRP report, which has been sent to the PUC for review.
HECO officials issued a statement saying they were reviewing Freedman’s findings.
"We are aware that he cannot certify our Integrated Resource Plan process and we appreciate his recognition that we provided substantial information addressing the principal issues identified by the Public Utilities Commission and met many requirements in the IRP Report and Action Plans," according to the HECO statement.
"Ultimately, our goal is to chart a future path to provide our customers with reliable, clean electricity at the lowest possible cost," HECO said.
