Dive Brief:

• The Hawaii Public Utilities Commission (PUC) should turn to customer-side solutions like demand response, energy efficiency and distributed energy resources, as well as streamline interconnection processes to prepare for the retirement of a 180 MW coal plant in Oahu, several parties recommended in comments last week.
• Regulators in the state are concerned that delays to a series of renewables projects could force Hawaiian Electric (HECO) to rely on fossil fuel generation after the plant retires in 2022. Last month, the commission opened a rulemaking to review HECO's interconnection processes and plans for that transition.
• HECO plans to retire two fossil fuel plants in the next few years that currently play a key role in grid reliability — the Oahu coal plant, which serves around 15% of demand on Oahu, as well as the 38 MW oil-fired Kahului plant on Maui, which is scheduled to close down in 2024. The utility also intends to shutter two units of an oil-fired plant in Waiau, also on Oahu, as soon as possible.

Dive Insight:

HECO plans to replace these plants with a combination of solar and storage resources, including the 185 MW Kapolei energy storage project, which is supposed to come online in summer 2022. But regulators are worried about delays to many of these projects, which stakeholders say are caused by HECO's interconnection processes. And because the Kapolei project is scheduled to come online before the others — pending regulatory approval — it would initially charge off fossil fuel generation, another area of concern for the commission. 

In comments filed with the PUC last week, some parties pointed to demand-side solutions that could help address potential shortfalls after the plants' closures. Automated demand response programs especially could both help stabilize the grid and reduce customers bills, GridPoint, an energy efficiency and demand response provider, said in comments. GridPoint can currently provide between 4 kW and 50 kW of on-demand capacity for each of the commercial sites it manages for up to four-hour periods; but if required, the company said it could increase that to 8 kW to 80 kW for shorter periods ranging from 15 minutes to an hour.

Expanding energy efficiency strategies could provide a "win-win" scenario for the state, both reducing load in the short term while also saving ratepayers money, the Blue Planet Foundation and Hawai'i Solar Energy Association agreed in comments. 

Other suggestions for the commission included easing restrictions on distributed energy resources (DERs), such as prohibitions that limit the ability of customer-sited solar PV systems to export to the grid. This could unlock additional generating capacity, especially since many of these systems are paired with storage, the Hawaii PV Coalition, the Hawaii Solar Energy Association and the Distributed Energy Council of Hawaii said in a filing. 

DERs are the "sleeping giant" of the Hawaii grid, Kylie Wager Cruz, staff attorney with Earthjustice, said in an email. But they've also been undervalued and underutilized for too long, she added — ever since the closure of the net energy metering program in 2015, utility DER enrollment efforts have been "anemic," and failed to meet capacity targets. 

"The DER industry is working on developing recommendations to meet the present challenge, and initial near-term suggestions include enabling next-generation net-metering programs targeted toward low income and condominium housing to spur DER expansion in these underserved markets," she said.

Some groups also pushed for measures to streamline interconnection processes, which have been identified as a bottleneck for some of the renewable projects in the pipeline. Poor modeling documentation, inconsistent cost estimates and high project management costs all contribute to the issue, the Ulupono Initiative, an investment firm, said in its filing. Regulators could address these issues by waiving interconnection studies and early engineering fees for specific projects, as well as developing pre-approved interconnection standards for others, the group added.

The Blue Planet Foundation and Hawai'i Solar Energy Association urged regulators to implement policies that would motivate the utility to move forward quickly, like sharing interconnection cost overages, setting a firm deadline on some of the community-based renewable energy program projects, and selecting an independent engineer who could supervise the entire process.